Have a child, it’d be the best thing that ever happened to you!” they say. But what they did not say is just how much there is to think about when it comes to having a child. How do you ensure you are a good parent? How do you strike a balance between parenting and your career? How do you ensure that you are financially secure and ready for their future? It seems like much, but, it’s all down to having the right knowledge and support to help you map out the journey ahead, one step at a time. That’s what we are here to help you with.
Start Planning Your Finances Today for a Better Tomorrow
As new parents, you are bound to have many firsts. Your first home, first child and so much more. And with a child comes a long list of expenses that many parents feel anxious about. It may seem overwhelming and you might think that you are far from achieving the financial goals needed for all your firsts. In truth, however big your goals are, they all start with taking the right first steps and putting plans into place.
DBS is here to help you with financial planning for all your firsts. They provide the advice and guidance you need, along with the plans to help you grow your finances. Before you know it, everything will be in place and you can start turning your dreams into reality! Here are 3 simple first steps you can take to get you started.
1. Set Up a POSB Smiley Child Development Account to Celebrate Every First
Many Singaporeans shy away from having children citing cost as the reason. But with the right financial planning, it doesn’t have to be so intimidating. Go forth with confidence, knowing that DBS will be with you for all your child’s firsts.
The POSB Smiley Child Development Account (CDA) is a special savings account for your newborn, with dollar-for-dollar matching from the government, so you get 100% more of what you put in! The government matches up to $3000 for the first child, up to $6000 for your 2nd child, up to $9000 for your 3rd and 4th child, and up to $15,000 for your 5th and subsequent children. In addition, you can enjoy up to 2% p.a. interest rate for amounts of $50k and below. (*SGD deposits are insured up to S$75K by SDIC).
Your CDA account will come in very handy when it comes to things like your child’s medical or childcare fee. This is especially so when you have more than one child’s expenses to manage. As long as the schools and clinics are Approved Institutions (AI) registered with the Ministry of Social and Family Development (MSF), you can use Nets or interbank GIRO to utilise the funds in the CDA. You will not be limited in your choice as most of these are AIs.
You can go on depositing savings in this account until 31st December the year that your child turns 12. Any unused amount will be transferred to their Post-Secondary Education Account and can be used to pay for your child, or his or her siblings’ post-secondary education fees.
2. Get Insurance to Protect Your Finances and Your Family
As we all know, life is full of unexpected twists and turns. While we can’t stop what is to come, we can mitigate its impact by always being prepared. If you don’t already have some basic insurance plans in place for yourself, it’s important that you do so. You know what they say about adults in their 30s and 40s being the sandwiched generation. We must worry about our children, as well as our aging parents.
Not sure where to start? DBS NAV Planner gives you a good view of all your financial needs and allows you to look at your finances holistically to ensure that you get just the right amount of coverage. It can help you find out if you are missing any crucial protection in your personal life and helps you to prioritise which insurance to take next, depending on your life stage. DBS recognises that you might not be able to purchase all types of coverage at one go. While not being covered is a concern, overspending on coverage is also not good. Did you know that 35% of adults regret their first insurance purchase1 as in hindsight, they realised their premiums were too expensive?
For a start, it is crucial that you have hospitalisation and critical illness insurance. Never skip these as in the unfortunate event that something happens to you, the financial burden of medical costs can take a huge toll on your entire family. You can get coverage for these at very affordable prices. When you have these in place, you can gradually look towards additional coverage in the form of Term Life Insurance and Savings Plans. For more information on getting started with coverage, you can visit this DBS website on first insurance. You might also want to consider getting personal accident coverage for your entire family with a product like MultiGen Protect.
Even if you have a substantial amount of savings, never underestimate how quickly it can be drained by a single medical bill. With the DBS NAV Planner tool, you can input information on your existing insurance plans, liquid assets and so on, to find out if you have any gaps in protecting your finances. As such, you can plan how to safeguard your savings so that you can invest your money in saving for your child’s university education and let insurance cover you in times of need!
When you have built your emergency fund, you can eventually consider fortifying it further. That’s when endowment plans come into the picture. These are highly customisable plans that allow you to invest and save for the bigger things in life such as your retirement, your child’s university education and so on. Again, don’t feel pressured that you must invest a huge chunk of your money here. Get the right advice and plan your finances accordingly. Take baby steps and increase along the way as you get more financially stable.
3. Get Connected with the Village
Surely you know that it takes a village to raise a child. Perhaps not just raising a child, but in your own journey as an adult with increasing responsibilities as well. You are bound to have many questions and moments of anxiety or insecurities if you are doing things right. At times like these, it is important to know that you are not alone, and that there are others walking the same path. POSB Parents is an online community for financial tips and it aims to teach, provide, and nurture people just like you! Don’t be afraid to get connected and you’ll be amazed at the support you find!
So there you go! All your financial needs and concerns under one roof. Remember, dreams turn into reality only if you take the steps to do so. However daunting the prospect of building a family seems, it’s something that most people go through and how smooth sailing the journey is really depends on how well you plan it out. You only live once, and life is too short for regrets and what ifs. Don’t miss out on the best moments in life due to uncertainties. Take the step and embrace each moment and every first in life. Remember, DBS is there with you, every step of the way!
*This article is for information only and should not be relied upon as financial advice. Any views, opinions or recommendation expressed in this article does not take into account the specific investment objectives, financial situation or particular needs of any particular person. Before making any decision to buy, sell or hold any investment or insurance product, you should seek advice from a financial adviser regarding its suitability.
*This advertisement has not been reviewed by the Monetary Authority of Singapore.
References
www.dbs.com.sg/personal/insurance/protection/protection-plans/first-insurance