In this article, we look at financial preparation for childbirth. Of course, having a baby goes beyond dollars and cents; no blog article or expensive parenting book is going to cover all the bases. But having a good idea of the costs will make it easier on you. If you’re expecting or planning to have a baby, this article is meant to give you a good idea of whether you are financially capable of having that kid, and what you need to set aside.
The bulk of your needs are covered by hospital packages. But don’t assume that’s all there is to it! There are extraneous costs which are often missed. We’ve tried to detail many of them here; in all cases, assume a high average for the numbers we give you. Pregnancy is complicated, and about as predictable as an Amway paycheck (i.e. arrives anywhere between October and forever).
Knowing Your Medisave Contribution – Medisave (drawn from your CPF) can defray the cost of maternity packages. Depending on your savings, the amount you can use will differ. In most normal deliveries, Medisave will shave off about $1200 from the maternity package.
Maternity Leave – Assume lost income from maternity leave. If you run your own business, taking leave during your pregnancy is harder; you may have to hire an assistant. If you work for a large corporation, you maternity leave is an entitlement under the Child Development Co-Savings Act. Also, as of 1 May 2013, fathers are now also entitled to share 1 week out of the 16 weeks. You can find out more about the details of maternity leave here.
While maternity leave lasts 16 weeks (4 weeks before pregnancy and 12 weeks after), your employer is only obliged to pay you for the first 8 weeks. Any payment beyond that is voluntary. Ask your HR department for more details. Regardless of the answer, plan to lose that month of income.
If you are self-employed, calculate if it’s worth hiring an assistant. Paying about $2000 a month may be better than going 12 weeks without business.
Hospital Stay – In general, you will buy a prenatal package and a delivery package. The prenantal package includes gynaecological services, along with ultrasound examinations. The delivery package covers your hospital stay, and sometimes the cost of the delivery itself. (You’d think they could come up with something other than “delivery package”; it sounds like a FedEx promotion)
Anyway, public hospitals will be the cheaper option. Delivery packages vary based on the kind of ward you want. Plan to pay anywhere from $1000 to $3000 for a delivery package, and around $500 – $900 for a prenatal package. The most popular and affordable rates come from KK Woman and Children’s Hospital, which has a delivery package for under $1000.
Note that the delivery package is the basic cost of the ward, consultations, etc. There may be extras. Also, the price of the actual delivery varies based on the type of operation; a Cesarean delivery will cost more than a vaginal delivery.
The price of delivery may not be included with the delivery package, which is a common source of confusion. The delivery package may cover your hospital stay only.
Additional Tests and Screenings – Blood tests, genetic tests, and ultrasound to name a few. These can range from $80 – $200 each time. Prenatal packages at the hospital usually include tests and screenings in the cost. However, set aside $500 for any extra tests, in case they’re needed.
Prenatal Classes – These cost around $600 to $1000, and vary from short workshops to ongoing lessons. Before paying, check if your prenatal package already includes one. Prenatal classes are not actually necessary, but they might help.
Baby Clothes and Accessories – Because your baby can’t be naked all the time. About $400 – $500 can provide clothes for a year, if you don’t care for brand names. Shop online for clothes and accessories; it’s cheaper than getting it from a store.
(Side note: no one is amused by squeaky baby shoes. Your friends and neighbours are not smiling. They’re gritting their teeth to express pain and irritation.)
Your baby’s room will need at least a cot and a mattress, and also a high chair. This bare minimum will set you back about $350 – $450. We based this estimate off the IKEA catalogue.
Vaccinations – There are mandatory vaccinations against diphtheria and measles, which should cost about $67 each. You can forego this for now, and wait till your child is in Primary 1.
Total Sample Costs
This is what a typical hospital stay might cost, based on average rates and a normal delivery. This table also assumes a 2 day stay in a private room.
|Item Cost (Approximate)|
(Includes consultations, ultrasound, dietary supplements, etc.)
(Simulation exercises, expert advice, mental and physical preparation)
(2 Days hospital stay, single room. Also assumes a normal delivery.)
|Extra Tests, Medication, Services, etc.
(These are notoriously difficult to predict. This assumes the average rate of $80 – $100 for most tests and scans).
(Sometimes included in the maternity package, depends on the hospital. We assume )
|Vaccinations, further Medication or Requirements
(Again, this depends on the hospital and situation.)
(For one year)
|Formula and Food
(For one month, assuming there are no special requirements)
|$125 a month, or $1,500 a year|
|Total (Logistics)||$2450 (First Year)|
(For first year)
|$4120 (Medical) + $2450 (Logistics) = $6570|
Well, that’s mostly it. Ponder each point on the list, and you’ll have a good estimate of how much you should set aside. Also remember that parents tend to overspend when preparing for a newborn. Before buying something, call up a friend, or even your own parents. Ask them if it’s really necessary.
Also, given that you’re going to be spending a relatively large amount in a short span of time, it would be good to make the most out of your expenditure. Head on down to SmartCredit.sg to find the credit card with rewards best suited to your needs. Make sure you also follow us on Facebook as we explore how to install the right financial values in your children later on as well!
What are your thoughts on the cost of giving birth and raising a child? Share them with us here
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