10 Financial To-Dos Before Welcoming Your Baby

One practical cost area that many parents don’t consider, until they urgently require it, is the extra money they can expect to spend on transport with the arrival of their baby.

Families that don’t own a car may consider buying one for convenience sake. Those who already own a car may intend to upgrade to a bigger vehicle for more space. Even those who are satisfied with public transport may find themselves taking taxi and private hire car rides more often than they used to. 

In line with a holistic financial plan, you may have already saved six to nine months of your average monthly expenditure. This is great, however, with the arrival of your new baby, comes new areas of expenses each month. Your new six-to-nine-month emergency fund needs to be revised upwards. 

To exercise prudence, you should incorporate these expenses into your emergency funds months in advance. So, be ready to save up more towards it. 

It’s easy to put off planning for expenses that are only going to be required years down the road. However, given the escalating costs of tertiary education in Singapore, this is no longer an expense that you can expect to comfortably afford without prior planning.

The best way to ensure that you can afford the future education needs of your child is to start investing early and regularly. Long-term savings plan such as AIA Smart Growth (II) can help your savings grow through a combination of both guaranteed and non-guaranteed returns.

For the next 18 years or so, your child is going to be financially dependent on you for his or her living needs. This means it’s timely for you to review your current insurance coverage to ensure that you have sufficient life insurance payout to cover your child’s future expenses in the event that you are no longer around.

AIA Pro Lifetime Protector lets you do this, as well as offers you the flexibility to reduce your focus on protection and increase it to wealth accumulation once your children are financially independent. This way, you get to enjoy potential returns from your plan while still receiving protection against death, disability and critical illnesses.

While Singapore does have an Intestate Succession Act, you should consider adjusting your will once you have a child to ensure that he or she will be taken care of in the event you and/or your spouse pass on.

This means you may have to review the beneficiaries on any insurance policies you own. You may also have to adjust any CPF nominations you previously made if you want to include your child.

If your will differs from the Intestate Succession Act, you may want to consider including how your property, investments and/or money should be distributed. 

Last, but certainly not least, you should start considering the types of insurance plans that your child would need. These should include medical protection, in the event that they fall ill and require hospitalisation and possibly critical illness protection, to provide coverage against various types of critical illnesses.

If you are unsure of the different types of life and health insurance plans to consider, speak to us at 1800 248 8000. AIA offers solutions to help you get your financial planning on track, regardless of the life stage that you are in. Get in touch at https://www.aia.com.sg/en/help-support/contact-us.html to find out how you can Be Life Confident.

¹Childbirth, Delivery (Normal) - Ministry of Health, 23 October 2017