You will be able to list and estimate the main costs of having a child in Singapore.
Mei and Daniel are now married and in their flat, and they've started talking about a child. Mei's sister, who has a two-year-old, gave them a piece of advice that sounded like a joke: "Budget for the things you can't see yet." She meant the months of unpaid leave she took, the infant care fees she didn't know about until the waitlist call, and the grandparents' help that saved her thousands but couldn't be counted on every day.
The costs of a child are easy to underestimate because most people think of the obvious ones, like diapers and milk, and miss the large ones. This lesson goes through the first five years in order, so that the child goal on your sheet starts from a full list. All figures here are made up for the example.
The costs start well before the birth. There are prenatal checks and scans through the pregnancy, then the delivery and the hospital stay, which vary a lot with the hospital, the type of delivery and the ward you choose.
MediSave can be used for delivery and some pregnancy-related costs, up to limits set by CPF Board, and some hospital plans cover parts of it. Check what your MediSave and any insurance will pay before you choose a hospital, and plan for the rest in cash. Lesson 6.2 covers the government support around the birth.
Then there is the set-up: a cot, a pram, a car seat if you drive or take taxis, clothes, bottles and the rest. Hand-me-downs from family can make this small, or it can run to a few thousand dollars.
Mei and Daniel estimate S$3,000 of delivery and prenatal costs after MediSave and insurance, and S$2,000 for the set-up. That is S$5,000 they need before the baby arrives.
After the birth, the costs shift from one-off items to monthly ones.
Care is usually the largest. Someone has to look after the child while both parents work. The main options are infant care for babies and childcare for toddlers at a licensed centre, a domestic helper, grandparents or another relative, or one parent staying at home. Each has a very different cost. A helper involves a salary, the levy set by the Ministry of Manpower, insurance and her living costs. Grandparents may cost nothing in fees but often come with a monthly allowance, and their help can stop if their own health changes.
Childcare fees vary by centre. Government subsidies administered by ECDA, the Early Childhood Development Agency, reduce them. How much you receive depends on things such as whether the mother is working and the household's income. Check the current subsidies and conditions on the ECDA website, and use the fee after subsidy from the centres near you.
The everyday costs come on top: diapers, milk powder or formula if needed, food, clothes that are outgrown every few months, medical visits and vaccinations, and enrichment if you choose it.
Here is Mei and Daniel's estimate. In the first year, Mei returns to work after six months, so they pay infant care for six months at S$700 a month after subsidy. Diapers and milk are S$250 a month, clothes and other items S$100 a month, and doctor visits and vaccinations about S$600 for the year. That comes to S$9,000. For years two to five, they estimate childcare at S$650 a month after subsidy, everyday costs of S$300 a month, and S$500 a year in medical costs: S$11,900 a year.
The largest cost is often the one that never appears as a bill: the drop in household income.
Parents in Singapore are entitled to some government-paid leave around the birth, subject to eligibility. Check the current leave schemes on the Made for Families website, madeforfamilies.gov.sg. Many parents take more time than that as unpaid leave, or one parent moves to part-time work or stops working for a few years.
Each of those is a real cost and belongs in the budget. Mei plans three months of unpaid leave after her paid leave ends. At her take-home pay of S$4,000 a month in the example, that is S$12,000 of income they won't receive. If she worked part-time for a year instead, the cost would be larger. If either of them stopped work for several years, it would dwarf every other line, and it would also reduce their CPF contributions for those years.
Mei and Daniel's first five years, before any government support, look like this: S$5,000 before birth, S$9,000 in year one plus the S$12,000 of lost income, and S$11,900 in each of years two to five. That totals S$73,600 over a little more than five years.
The numbers are made up, and yours will differ a great deal depending on care arrangements, hospital choice and how much leave you take. The point of the list is that the largest items are care and income, not the items people usually talk about. Lesson 6.2, Baby Bonus, the CDA and other support, shows what the government contributes against this total, and lesson 6.4 builds it into a year-by-year budget.
When you write your own list, separate the figures you have checked from the ones you have guessed, and mark each guess so you know what to replace when you get real quotes.
List the costs for the first five years of a child with an estimate and source for each, using made-up figures where unknown.
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