What should I know as a parent?

4 major financial decisions to make for a growing family

Is your child asking you about getting a little brother or sister? If you’re thinking about adding another bundle of joy to the family, know that it’ll bring you immense happiness, but could also make life more stressful for you. According to the 2016 Prudential Relationship Index report, money and children are among the biggest sources of arguments among couples. Plan your finances ahead of making major life decisions so they don’t strain your relationship with your spouse and so you have enough savings to deal with the many expenses later, such as childcare services, employing a helper or going on family vacations.

What kind of money parent are you? Take our 2-min quiz to find out.

1. Purchase a property for the family

A home is probably the most expensive purchase you’ll ever make in your life, and you may feel wary about committing to such a large financial responsibility. Once you decide to have more children, however, stability will become a priority. The good news is, while property prices do fluctuate, a home of your own will likely create equity for you in the long run.

2. Prepare for your children’s education

Aside from raising young children to adulthood, most parents also support them in the early years of their adult life, which include tertiary education. A global survey by HSBC found that Singaporean parents spend an average of S$96,000 on their children's education, from primary school to the undergraduate level. And, the cost of education is expected to rise, particularly for higher education — a 2016 study by the Economist Intelligence Unit projected that the cost of a four-year degree will increase from just over half of an individual’s average yearly income in 2015 to a whopping 70.2 percent in 2030. With more children on the way, making plans to ensure that your children’s university fees are covered will be a necessity.

3. Get life insurance

We all want the best for our family, and with more children on the way, the first thing that comes to mind might be ways to increase your income to better provide for them. But making sure that you and your family are protected from uncertainties is just as important, if not more.

A 2017 report by the Ministry of Social and Family Development shows that over 65 percent of families with at least one child below the age of 21 are dual-income families, which means an unexpected life event where even just one — let alone both — parent loses the ability to work is bound to negatively impact the family’s finances. Life insurance offers a safety net for your family in the event that you’re no longer around or able to take care of them and is an important decision parents must make.

4. Start saving up for retirement

With a growing family, too often many parents will prioritise their children’s needs before their own. As well as getting prepared with all of the aforementioned, it’s important not to forget about your own retirement. According to the 2017 Melbourne Mercer Global Pension Index, Singapore has the best pension system in Asia but the Central Provident Fund will only get you so far. You need to consider the lifestyle you want to maintain after you retire — money for food, transport and health care only covers the very basics of needs. What if you enjoy travelling and want to achieve your lifelong dream of seeing the world after you retire? Will you have paid off your mortgage by then? It’s never too early to start thinking about your retirement savings plan — one that will provide you with monthly passive income — so you can live the way you want to in your golden years.

While it’s important to teach your children the sense of money management, we know protecting your children’s health is a top priority. Consider these three insurance plans for your child.

Get #MoneyParenting insights in your inbox

Insider access to the latest content, tools and events

Your privacy is important to us. Learn about our privacy policy and how we protect your personal details.

This document is produced by Eastspring Investments (Singapore) Limited and issued in:

Singapore and Australia (for wholesale clients only) by Eastspring Investments (Singapore) Limited (UEN: 199407631H), which is incorporated in Singapore, is exempt from the requirement to hold an Australian financial services licence and is licensed and regulated by the Monetary Authority of Singapore under Singapore laws which differ from Australian laws.

Hong Kong by Eastspring Investments (Hong Kong) Limited and has not been reviewed by the Securities and Futures Commission of Hong Kong.

Indonesia by PT Eastspring Investments Indonesia, an investment manager that is licensed, registered and supervised by the Indonesia Financial Services Authority (OJK).

Malaysia by Eastspring Investments Berhad (531241-U).

United States of America (for institutional clients only) by Eastspring Investments (Singapore) Limited (UEN: 199407631H), which is incorporated in Singapore and is registered with the U.S Securities and Exchange Commission as a registered investment adviser.

European Economic Area (for professional clients only) and Switzerland (for qualified investors only) by Eastspring Investments (Luxembourg) S.A., 26, Boulevard Royal, 2449 Luxembourg, Grand-Duchy of Luxembourg, registered with the Registre de Commerce et des Sociétés (Luxembourg), Register No B 173737.

United Kingdom (for professional clients only) by Eastspring Investments (Luxembourg) S.A. - UK Branch, 125 Old Broad Street, London EC2N 1AR.

Chile (for institutional clients only) by Eastspring Investments (Singapore) Limited (UEN: 199407631H), which is incorporated in Singapore and is licensed and regulated by the Monetary Authority of Singapore under Singapore laws which differ from Chilean laws.

The afore-mentioned entities are hereinafter collectively referred to as Eastspring Investments.

The views and opinions contained herein are those of the author on this page, and may not necessarily represent views expressed or reflected in other Eastspring Investments’ communications. This document is solely for information purposes and does not have any regard to the specific investment objective, financial situation and/or particular needs of any specific persons who may receive this document. This document is not intended as an offer, a solicitation of offer or a recommendation, to deal in shares of securities or any financial instruments. It may not be published, circulated, reproduced or distributed without the prior written consent of Eastspring Investments. Reliance upon information in this posting is at the sole discretion of the reader. Please consult your own professional adviser before investing.

Investment involves risk. Past performance and the predictions, projections, or forecasts on the economy, securities markets or the economic trends of the markets are not necessarily indicative of the future or likely performance of Eastspring Investments or any of the funds managed by Eastspring Investments.

Information herein is believed to be reliable at time of publication. Data from third party sources may have been used in the preparation of this material and Eastspring Investments has not independently verified, validated or audited such data. Where lawfully permitted, Eastspring Investments does not warrant its completeness or accuracy and is not responsible for error of facts or opinion nor shall be liable for damages arising out of any person’s reliance upon this information. Any opinion or estimate contained in this document may subject to change without notice.

Eastspring Investments (excluding JV companies) companies are ultimately wholly-owned/indirect subsidiaries/associate of Prudential plc of the United Kingdom. Eastspring Investments companies (including JV’s) and Prudential plc are not affiliated in any manner with Prudential Financial, Inc., a company whose principal place of business is in the United States of America.