Rethink your finances for the future as you’d have to look after more than just yourself.
Looking to start a family soon? Planning ahead, then, is of paramount importance. This is especially so when it comes to the family’s finances. Those who are about to start a family or are currently young parents often feel the pressure as they find themselves sandwiched between supporting ageing parents and their children.
While it may seem as though having a family is a daunting task, we hope that some of what you’ll be reading below can help kickstart your process of financial planning.
Giving your savings a head start will go a long way
Having ageing parents and children at the same time requires serious financial planning for the future. Your finances may take a sudden hit should something untoward happen to either of the aforementioned parties.
Some examples include medical emergencies, illnesses and retrenchment. As COVID-19 has so saliently demonstrated, unemployment is a serious concern that can happen overnight and cut off income streams in a heartbeat.
That is why saving before starting a family is extremely important. As a gauge, you should have about six to 12 months’ worth of living expenses in your emergency fund, like what most financial advisors would caution.
Don’t forget that Singapore’s cost of living is constantly on the rise. Family or not, one should always start saving from an early age.
Raising a child in Singapore costs you the price of a three-room HDB?
When saving with your family’s finances in mind, you would do well to adopt a long-term vision and put aside money for events that you know will rattle your finances. Case in point: all the expenses, big and small, over the course of your children’s lives.
Of course, some things can’t be predicted, like accidents and illnesses. What we do know, is that raising a child comes with inevitable big-ticket expenses like education, so it’s best to be prepared. According to 2018 data, the estimated cost in bringing up a child is approximately $340,000.
Although schools are heavily subsidised by the government, most Singaporean parents struggle when they start sending their children for tuition and other enrichment classes. Eventually, when they start attending university, that would present another challenge to your finances—especially if you’re planning to send them for overseas education.
Making personal sacrifices
Having a family is a huge responsibility, which means you may have to give up certain luxuries from before to ensure that your family leads a more comfortable life. Living simply will aid enormously in your journey to save. You can start by swapping out that Starbucks frappe for a humble cup of kopi!
You may read up more on credit repayments and what credit facilities are available to ensure that you are staying abreast of the latest information, just so you can better plan for your family.
This article is originally written by Credit Bureau Singapore.
Read these next:
Best Alternatives to Savings Accounts in Singapore
5 Best Robo Advisors To Auto-Pilot Your Investments in Singapore
5 Best Brokerage Accounts To Start Your Investment Journey In Singapore
Regular Savings Plan (RSP): What They Are And The Best Ones To Invest In
Fixed Deposit vs Singapore Savings Bond (SSB) vs Savings Account: Where To Put Your Money?
Credit Bureau (Singapore) Pte Ltd (CBS) is Singapore’s most comprehensive consumer credit bureau that has full-industry uploads from all retail banks and major financial institutions. CBS assists members in their credit approval process and protects their credit profile, by providing objective and factual information collated from members.