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Mum and dad, here’s some money tips on growing your savings while raising your family
A financial expert shares advice on how you can manage, plan and grow your family finances
It is necessary to build your savings and be sufficiently insured as the short- and long-term costs of raising your child will keep increasing with inflation.
PHOTO: GETTY IMAGES
This year’s Budget saw greater financial support for families, with adjustments to existing schemes such as the Working Mother’s Child Relief and Baby Bonus cash gift.
Still, there are a range of short- and long-term expenses to consider through the stages of parenthood. In celebration of Mother’s Day (May 14), Ms Jacquelyn Tan, head of Group Personal Financial Solutions at UOB, answers some of your key questions on bolstering your finances while raising a family.
Ms Tan, who is in her 40s, is responsible for the consumer banking business in Singapore and the region, overseeing the lending, deposit and wealth management businesses that serve a wide range of client segments. The mother of one has over 23 years of experience in the finance industry.
Q: I’m a working mother with two teenage children. How should I plan for my retirement?
A: Taking care of our retirement means we will not become a financial burden to our children, giving them greater financial freedom.
It pays to start building your nest egg as early as possible, as this gives your investments more time to compound returns and grow.
Before you think about saving for tomorrow, first make sure you are protected today against the unexpected. Many mothers prioritise other family expenses over their insurance coverage, but having enough hospitalisation, critical illness and disability coverage protects both you and your family.
To support women on their journey towards greater financial confidence, we created the UOB Lady’s Savings Account, which offers complimentary coverage for six female cancers as they save.
When you are sufficiently protected, you have peace of mind to grow your wealth. After years in the workforce, you may have many savings accounts, insurance plans and investments. Review your holdings holistically for a better sense of whether you are on track with your long-term goals.
Our UOB advisers are equipped with Portfolio Advisory Tools, digital tools enhanced with Singapore Financial Data Exchange, or SGFinDex, data to analyse one’s holdings across multiple bank accounts and government agencies. These tools draw on historical data to simulate how your portfolio would fare under different market conditions and determine if you should make adjustments. As your needs evolve, so should your wealth plan.
Q: I stopped working this year to take care of my toddler. What can I do to grow my savings?
A: With inflation, the cost of raising your child will keep increasing. This consists of both daily necessities and longer-term expenses such as education.
Now, without a salary as a source of income, it is even more important to invest to grow your savings. Endowment plans can also offer protection coverage while helping you grow your money for long-term needs.
Review your budget and prioritise needs over wants, because you may have to cut back on your spending to stick to your financial plan. Familiarise yourself with how your MediSave account and insurance plans can defray your healthcare expenses.
As with all mothers taking care of a newborn, I imagine this is an exhilarating but stressful period in your life, and you may not have time to extensively research what to invest in.
For investors like yourself, we developed SimpleInvest fund portfolios so you can simply choose from four curated portfolios – each catering to different investment goals and risk appetites – on our TMRW app.
These portfolios are actively managed. In particular, the Income and Growth portfolios are closely watched and rebalanced based on insights from UOB Private Bank’s Chief Investment Office.
Q: My mother is a homemaker who does not have her own source of income. Is there anything I can do to better secure her financial future while I take care of my own?
A: The risk of developing chronic illnesses increases as we age. Assess if your mother has sufficient medical insurance, as she may not have a lot of MediSave savings.
This is one of the principles behind our Risk-First Approach: Be adequately protected against risks before looking to grow your wealth.
To supplement your mother’s nest egg, consider topping up her Central Provident Fund (CPF) Special or Retirement Account, so she can receive higher monthly payouts. As an added bonus, you enjoy tax relief with your top-ups.
It is prudent to also keep an eye on your retirement. One way to bolster your retirement savings is to make contributions to a Supplementary Retirement Scheme (SRS) Account. This is a voluntary scheme that encourages you to save beyond your CPF contributions by offering tax relief on your SRS top-ups.
You earn 0.05 per cent interest per annum on your SRS account balance, so consider investing those funds to try and achieve stronger returns. You can use your SRS savings for a variety of investments, including insurance plans and unit trusts like those on UOB SimpleInvest. Since you can only withdraw your SRS funds when you reach the statutory retirement age, you have a longer time horizon the earlier you invest these funds.
Rethink Your Wealth provides advice and insights from experts and answers to your money-related questions.
