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Expecting a baby? Here’s how you can ease financial stress during early parenthood
One example is a maternity insurance plan, which provides a financial protection for both the mum and newborn
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A pressing concern for many first-time parents is: How much money do I need to raise a child?
PHOTO: GETTY IMAGES
Kareyst Lin, Content STudio
Ms Jasmine Chye, 35, had a rude shock when she was denied maternity insurance coverage during her second pregnancy earlier this year.
The reason? She had gestational diabetes when expecting her firstborn son, now three years old.
The digital marketing manager, who gave birth to her daughter late last month, recalls: “Even my insurance agent was surprised by the rejection, as (the gestational diabetes) was well managed and my blood sugar level returned to normal after my son was born.”
Flustered, she scrambled to find another insurance provider. “I was worried that if any health complications were to arise for me or the baby, the potentially high medical costs (without maternity insurance coverage) could be a huge strain for my family,” says Ms Chye.
Maternity insurance plans provide protection for both the mother and the baby against pregnancy complications and congenital illnesses. These can include premature birth requiring care in the neonatal intensive care unit, miscarriages, congenital heart diseases, and more.
Most insurance companies allow expectant mothers to purchase maternity insurance plans from the 13th week of pregnancy.
Medical conditions that could affect eligibility include gestational diabetes, high blood pressure, fibroids growth in the womb and previous miscarriage history, and more.
Ms Chye soon found another insurance provider, but the company asked her to submit 31 consecutive days of blood glucose readings to prove that her gestational diabetes was under control.
To her relief, the coverage was eventually granted. By then, Ms Chye was 37 weeks pregnant.
“(Purchasing a maternity insurance plan) was a no-brainer because it helps to take this (financial) stress off our minds.”
Health and money worries
Ms Chye’s concerns over high healthcare expenses are shared by most Singapore residents.
The Manulife Asia Care Survey 2023 released in March found that 94 per cent of Singapore respondents say they feel anxious or frustrated in managing their health. Their main concerns centre around money – the potential cost of treatment (49 per cent), and potential loss of income or job (42 per cent) if they were to fall seriously ill.
Conducted between late December 2022 and early January 2023, the study polled 1,037 Singapore residents and covered 7,224 respondents in seven markets across Asia.
“For soon-to-be parents, maternity insurance plans provide an important financial safety net,” says Ms Jasmine Teo, associate director of sales, Financial Services, from Affluence Wealth Advisory, an agency branch representing Manulife Singapore.
With 11 years of experience in the financial services industry, 32-year-old Ms Teo primarily advises women in their 50s and 60s, who make up 70 per cent of her client base.
She is mother to a pair of six-year-old twins (a boy and a girl), and welcomed her third child, a daughter, earlier this month.
Financial cost of raising a child
For many first-time parents, a pressing concern is: How much money do I need to raise a child?
Ms Teo offers an estimate of at least $500,000 a child from her own experience.
This figure takes into account the expenses of a child’s daily necessities, education and enrichment programmes from infancy to age 25, when they are expected to be financially independent.
As someone who understands firsthand the financial demands of parenthood, Ms Teo candidly shares that “when my husband and I discovered that we were expecting twins, the realisation doubled our joy, but also our financial requirements.
“The impact was immediate – right from having to purchase two sets of maternity insurance plans at week 13.”
Juggling multiple responsibilities
Another parent, Mr Henry, who asks that we not share his last name, says that his monthly household expenses have increased by about 10 per cent since his kids were born.
The army regular and his wife, both 31, have a three-year-old daughter and a one-year-old son. His wife works as an engineer and they earn a combined household income in the low five digits.
While their budget is now “manageable”, they expect a spike in expenses as both kids grow older and start to explore enrichment programmes.
“If they show interest in certain areas, such as dance or music, we want to provide them with the avenue to explore their interest and learn new skills,” Mr Henry says, adding that enrichment programmes are one of the most costly aspects of parenthood.
He and his wife now allocate between $200 to $300 monthly for their daughter's enrichment activities.
“Occasionally, we pay a nominal fee of about $30 for supplementary activities, such as science lessons, at her childcare centre. Externally, she attends drama classes that cost about $100 a month,” Mr Henry shares.
Ms Teo says: “Many parents with young children face huge financial and emotional pressure as they grapple with the rising cost of living, planning for their children’s future needs and, for some, having to take care of ageing parents.”
The same Manulife survey released in March found that among Singapore respondents, 60 per cent of parents with young kids view saving for retirement as their No. 1 personal finance goal.
However, only 36 per cent of them have a retirement plan in place.
Mr Henry says he has yet to start retirement planning. His immediate financial priorities are the education and lifestyle needs of his children.
The official retirement age in Singapore is now 63, and will be progressively raised to 65 by 2030.
“Retirement feels like a long time away. Right now, my focus is on finding a balance between work commitments, parenthood, and personal aspirations,” says Mr Henry, who is thinking about a mid-career switch to pursue his childhood dream of being a hawker.
Parents with young children often find the early childhood years exceptionally stressful, and this is mainly due to infant care and child care costs, explains Ms Teo.
“But once the kids embark on their primary school education at the age of seven, the (monthly amount that was spent on childcare) can be directed to other purposes, such as retirement planning, or the children’s tertiary education.”
Managing a new lifestyle and rising expenses as a growing family can be immensely stressful. Amid practical considerations such as finances, Ms Teo emphasises that “it’s essential not to overlook your own mental health and emotional well-being”.
She advises parents to build a strong community of support to lean on during challenging times, and seek professional help when necessary.
“Meanwhile, proper financial planning and adequate insurance coverage can also help provide you with the peace of mind to fully embrace the joyful and rewarding experience of parenthood.”
This is the ninth of a nine-part series titled “Your wealth and well-being”, in partnership with Manulife Singapore.
