Parents read this article to learn how you can use the Child Development Account wisely to give yourself the flexibility of spending more time with your child in his early years.
Singapore: An ideal place to bring up kids
Congratulations on becoming a parent, you could not have asked for a better country to have a baby in! Singapore is one of the best places in the world to bring up a child.
It has excellent healthcare, one of the best education systems in the world, and plenty of opportunities for maximising potential, personal growth and development for children of all ages.
As a parent, you will want nothing more than to give your child the best future that you possibly can. This means that you will try your hardest to make every possible opportunity available to your child, so that he or she can have a head start in life.
However, being able to provide your child with all that you want comes at a cost – and the cost is not just a financial one.
Time with kids is the tradeoff
Giving your children the best of everything — enrichment classes, trips to the zoo, sports training or just a fun family day out – all come at a price.
The financial cost is of course apparent. The cost that is not evident immediately is time cost.
The fact that you will have to work harder and longer to be able to provide the resources necessary to give your child access to many of the opportunities, mean that you will have fewer hours in the day to spend with him.
In fact, studies have shown that Singaporeans work the most number of hours in a year. So the cost of giving your child the best is significantly reduced family time.
Given a chance, this is not a tradeoff that any parent would want to make. A survey conducted amongst Singaporean parents revealed that most parents regret not spending enough time with their kids, especially in the early years.
However, giving up your job to be able to spend more time with your children is not a real choice for many parents.
The alternative option then for many parents is thoughtful financial planning.
By saving and investing wisely you can allow yourself a certain flexibility, or at least give yourself the option of a choice. If you have savings in place, you can opt to take a couple of years off work, to devote to your children in their formative years.
As a new parent, there is no better time to start than right now, when your little one’s growing years are still ahead of you.
Start with the Baby Bonus
The Singapore government has in place the Baby Bonus Scheme to support couples in their decision to have more children, by helping to lighten the financial costs of raising children.
The Baby Bonus Scheme explained
The government’s Baby Bonus Scheme has two parts to it:
- Cash Gift
Parents receive a one-time monetary gift of $8,000 for their 1st and 2nd child and $10,000 for the third child onwards. Parents can expect to receive the cash gifts within 7 to 10 working days of their child’s birth registration and this can be used to pay for their newborn child’s expenses.
- Child Development Account (CDA)
This is the savings linked element of the Baby Bonus Scheme. Under the CDA scheme, the government will match any sum of money that you save, dollar for dollar, up to the following cap amounts.
- First child: $6,000
- Second child: $6,000
- Third child: $12,000
- Fourth child: $12,000
- Fifth child and above: $18,000
That means if you deposit $2,000 into the CDA, the government will give you an additional $2,000 the next month, doubling your savings. But parents need to remember that they are only allowed to keep the CDA open until their child turns 12 years old.
As part of the Baby Bonus Scheme, the Child Development Account (CDA) is meant to help parents get more out of their savings for their kids which can, in turn, allow them to make the choice of working fewer hours and spend more time with their kids.
As parents who have not benefited from this CDA government dollar-for-dollar matching scheme before, you ought to know that in order to receive it, you must open a CDA with one of the selected banks such as UOB and deposit money in it, to start receiving this benefit
Read on to find out how opening your CDA with UOB could help you stretch your dollar more. For latest updates of the product, you may visit our page.