The True Cost Of Raising A Child In Singapore

With more Singaporeans marrying later and having fewer children, Singapore faces the problem of a declining population. At just 1.16, current fertility rates are too low to maintain the population levels in Singapore.¹ Singaporeans have therefore been encouraged to start a family at an earlier age so as to allow for more children. However, while schemes such as the baby bonus are meant to incentives couples to have more children, are they really enough to offset the high costs of having a child in Singapore?

(See "3 Reasons To Use Your SRS For Annuities")

#1 First year costs

While pre-natal check-ups and supplements may be expensive, these costs only show the tip of the iceberg. In fact, with a substantial amount necessary for delivery and first year costs, your expenditure is likely to further increase.

Depending on your delivery procedure and choice of hospital, you can expect to spend between $3,700 for a normal delivery at a public hospital ward² to $17,000 for a caesarean delivery at a private hospital ward³. Additionally, consumables such as diapers, formula milk, baby clothes and other miscellaneous items would also need to be purchased. Lastly, regular paediatrician visits are also required to monitor your child's growth and development and also to allow him/her to receive the compulsory vaccination jabs.

(See "How Much Should You Have In Your Emergency Stash?")

#2 Education

With your child's education spanning over the duration of up to 18 years, an early start to planning would help you to be able to comfortably afford your child's education.

The first 11 to 13 years of education for your child is made affordable with tuition fees for primary, secondary and junior colleges heavily subsidised for Singaporeans. However, expect to spend more on your child's tertiary education with polytechnic and university having higher tuition fees. Furthermore, while the cost of a local degree averages around $30,483 to $40,644, attending a private university or heading abroad for their studies would result in a heftier price tag. Sending your child to tuition and/or enrichment classes would further add on to the costs needed.

(See "What Wikipedia Can't Tell You About Your Child's University Education")

#3 Allowance

Another aspect for consideration would be your child’s allowance during his/her schooling years. For starters, a meal at the school canteen is likely to cost anything between $1.50 to $3. This then amounts to approximately $10 to $15 a week in allowance. Additionally, your child would require extra allowance for their lunch if he/she has to stay back for extracurricular activities or remedial lessons in school.

However, do note that this does not include transportation costs and therefore, you may wish to factor in another $40 to $50 a month for a concession pass.⁴

(See "5 Ideas That Can (Almost...) Give You A Lifetime Of Income")

#4 Inflation

Historical inflation rate in Singapore stands at an average of 2.62% between the years 1962 to 2018.⁵ As such, inflation should be factored into the amount required to raise a child as the timeframe expected to provide for your child would be from birth until financial independence. This would likely be for a period of at least 20 to 25 years or until graduation from university and could cost an estimated $200,000 or up to $1 million.⁶

(See "How Much Does It Cost To Live In Singapore 30 Years From Now?")

Planning for your child's future

Start planning for your child's future to ensure that he/she would not miss out on any opportunities due to financial constraints. This also allows you to beat inflation and set aside a larger amount for your child's future. To start saving for your child's future, consider using a savings plan, investments or children/education oriented endowments.

(See "Comparing Endowment Policies")

How FSMOne can help you get on track

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^{1Source: http://www.straitstimes.com/singapore/tackling-singapores-baby-shortage}

^{2Source: https://www.moh.gov.sg/content/moh_web/home/costs_and_financing/hospital-charges/Total-Hospital-Bills-By-condition-procedure/Childbirth_Delivery_Normal.html}

^{3Source: https://www.moh.gov.sg/content/moh_web/home/costs_and_financing/hospital-charges/Total-Hospital-Bills-By-condition-procedure/Childbirth_Delivery_Caesarean_section.html}

^{4Source: https://www.sbstransit.com.sg/transport/trpt_fares_concession.aspx}

^{5Source: https://tradingeconomics.com/singapore/inflation-cpi}

^{6Source: https://www.todayonline.com/business/prepare-cost-raising-child-0}

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