When Mrs S W Sng first learnt about her pregnancy seven years ago, financial considerations were the furthest from her mind, never mind that she and her husband barely had any spare cash left from their lavish wedding and down payment for their new flat. 
“The baby was the first grandchild for both our families. We were so excited that we didn’t even bother to consider the costs of preparing for a new addition to the family,” said the 32-year-old homemaker.
Reality sank in shortly after — in the form of a costly hospital bill. 
Although Mrs Sng had originally planned for a natural drug-free birth, complications set in during labour, resulting in an emergency C-section. 
The private hospital bill amounted to about S$10,000, which was about triple of their original estimated bill and Mr Sng’s monthly income as a civil servant then. 
“We thought our Medisave would be able to cover most of our delivery bill but we ended up with substantial out-of-pocket costs. However, the most important thing is that our baby is well and healthy,” she shared. 
“On hindsight, we should have been better prepared financially and wiser about our expenditure on non-essential items.”
The hefty hospital delivery price tag is just a fraction of what they have shelled out to raise their child in the past few years. 
“There are other expenses, such as childcare costs, enrichment classes and medical fees that parents-to-be have to consider, too. Raising a child is a long-term investment. In Singapore, it can be very costly if you want all the frills,” said Mrs Sng. 
While you might not be able to cover all unexpected scenarios, plunging into parenthood without having a financial plan may spell trouble. 
Here’s a look at what you will need to consider before you welcome a new addition to your family. 

1. Count your prenatal care and delivery costs
Prenatal and delivery costs are among the most pressing financial considerations you would have to make when planning for a baby. A trip to the obstetrician’s office is a given after a positive pregnancy test, and you’ll have to factor in the costs of consultations and prenatal supplements. Most clinics offer antenatal packages, usually from the second trimester onwards, that cover routine consultations up to delivery. 
Depending on your budget and preference, the price of an antenatal package may range anywhere from under S$1,000 to above S$2,000. The package usually does not cover detailed scans, certain screening tests or when your doctor prescribes certain medications or supplements. 
The next big-ticket item in your journey to parenthood is the hospital delivery package. This may cost over S$10,000 for a normal delivery, if you opt for a single-bedder in a private hospital. 
You can offset some of the costs using the funds in your Medisave account. Under the Medisave Maternity Package, couples can withdraw up to S$450 from their Medisave account to pay for pre-delivery medical expenses. You can also withdraw up to S$450 per day in the hospital and an additional surgical withdrawal limit of between S$750 and S$2,150 depending on the type of delivery procedure you undergo.
Even so, bear in mind that additional out-of-pocket costs can be incurred should pregnancy and delivery complications arise, which brings us to our next point.

2 Have an SOS fund for unexpected expenses 
If you haven’t set aside an emergency fund, this is the time to do so. For those who already have one in place, review your safety net to see if you need to top up, now that you have a baby on the way. 
An emergency fund can help see you through the short term, and in the event of unexpected situations, such as medical emergencies, injuries or unemployment — all of which can be financially challenging when it comes to raising a child. 
How much savings you should set aside depends on your disposable income and your day-to-day expenses. 
Most financial experts would recommend that you have enough funds to cover your family’s living expenses for at least three to six months.

3. Budget for expenses for mother and baby
With so many choices out there, it is easy to go on a spending frenzy when shopping for mother and baby essentials. The key word here, however, is “essentials”. 
Set aside a budget for must-buy items. For couples with limited funds, consider making a must-have versus luxury list to help you weed out distractions on your shopping trips. Focus on ticking off the necessities first. Consider that cute baby luxury item only when you have leftovers from your budget. 
Remember to factor in a budget for large post-delivery expenses, such as hiring confinement help, baby’s one-month celebration as well as baby’s medical checkups and vaccinations. These can leave a huge gaping hole in the pockets of ill-prepared new parents. 
If you are a first-time parent, consider getting advice from the veterans. Experienced parents may be able to refer you to good deals and offer tips on how you can stretch your dollar while shopping for yourself and your baby. 

4. Weigh your childcare options
Weighing the viability and the costs of childcare options is one of the top priorities of a working parent. You should think about this early, ideally during your pregnancy, as you will need time to scout for a reliable infant care or babysitting service, and work out its cost.
Whether you decide to engage a nanny or live-in domestic helper, get help from relatives or use an infant-care service when you return to the workforce, you can be sure that it will add to your growing monthly financial obligations.
Parents who wish to enrol their child into an infant or childcare centre can tap into infant and childcare subsidies provided by the government to defray some of the costs. 
Visit www.childcarelink.gov.sg or visit a childcare centre for details. 
Even if you do decide to take on full-time parenting duties yourself, you and your spouse will have to consider the consequences of income loss: How would a lower household income affect your family’s quality of life? 
While being a stay-home parent might be a rewarding experience, there might be career opportunity costs from being away from the workforce for too long. 

5 Budget for Junior’s future 
Raising a child is costly but you can make it less daunting by saving early. 
Comprising a cash gift and a Child Development Account (CDA), the Baby Bonus Scheme is designed to help families lighten the financial load of raising a child. The CDA is a special government matching co-savings scheme for children. 
Besides using it to offset some of the immediate expenses, you may also use it to plan and save for your child’s future. 
You can deposit savings into your child’s CDA, and have it matched dollar-for-dollar by the government. The government will match the deposits at up to S$6,000 for your first and second child, up to S$12,000 for the third and fourth child, and up to S$18,000 for the fifth and subsequent child. 
The CDA can be used to pay for childcare or healthcare expenses at Approved Institutions (AIs) registered with the Ministry of Social and Family Development (MSF). Visit www.babybonus.msf.gov.sg/parent/ to learn more.
Another thing to consider when saving for your child is to allocate a monthly budget for health protection and/or education savings plans. They are intended to cover your child’s future medical and education costs, which are estimated to increase over time with inflation.
Today, annual tuition fees at a local university may range from around S$8,000 to over S$25,000, depending on the course. 
Do note that buying an insurance policy requires long-term commitment, so it is important to work out your budget properly. Discuss with a financial planner how you can stretch your savings to get the best coverage and returns. 

Stretch your child’s savings with a POSB Smiley Child Development Account

Raising a child may be costly but you can make it less daunting by saving early with the POSB Smiley Child Development Account (CDA), a special savings account for your newborn with dollar-for-dollar matching from the government. 
With this account, you get to enjoy 2-per-cent per-annum interest, fixed for five years with no minimum amount required. Your POSB Smiley CDA comes with a POSB Baby Bonus NETS Card. 
Besides enjoying privileges at over 30 merchants, you can also use it to pay for childcare or healthcare expenses at Approved Institutions (AIs) registered with the Ministry of Social and Family Development (MSF) via NETS or interbank GIRO.
A joint POSBkids Account comes with every opening of a POSB Smiley CDA. This frees up your time and makes it more convenient for you to save for your child’s future. Simply activate the POSBkids Account to receive a welcome gift.
When it comes to saving for your child’s education, it pays to plan early. Sign up for a POSB education savings insurance plan and receive a limited-edition Smiley Gold Bar worth S$169, exclusively for POSB Smiley CDA customers. Limited to the first 1,000 customers. The education savings insurance plan must have a minimum of S$250 monthly premium. Terms and conditions apply. 
For more information on POSB Smiley CDA, visit www.posb.com.sg/cda.

Produced by The TODAY Special Projects Team