How Much Do You Need to Raise a Kid in Singapore

Kids are a bundle of joy and they bring laughter and happiness into a household. However, the reality is that raising a child in Singapore involves a lot of different expenses.

In order to maintain current population numbers, the fertility rate should be at least 2.1 and above in a country. However, Singapore’s fertility rate was 1.14 in 2018.  

As Singapore gets more expensive for people to live in, the amount required to raise another human being is an extravagant amount that deter many from having kids early, or any at all.

Here is a breakdown on the major areas where you’ll need to spend the most amount of money on. While this may not be a comprehensive list, it should serve as a well-estimated guide for you to prepare yourself on the road to parenthood.

1. Pregnancy

At this stage, bulk of your expenses would go to the frequent medical check-ups as well as the cost of childbirth itself. Prenatal check-ups are estimated to be aroun$2000-$2500 in a private hospital, or around $500 in a public hospital. The cost of childbirth depends on what type of hospital are you delivering in, as well as if you are going for a natural birth or a Caesarean section birth.

According to the Ministry of Health (MOH),the median for a Caesarean section birth at a private hospital can cost around $12,261, while the same procedure costs $2,948 in a class B2 ward at a public subsidized hospital.

While there is a Medisave Maternity Package (MMP) that can help offset some costs for child delivery, you would still need to fork out a few thousands dollar should you opt for a delivery in a private hospital.

In the event of a possible pregnancy complication, you may also need to fork out even more money for treatment purposes. If you are interested in financially protecting yourself against such occurrences, you may want to consider purchasing pregnancy insurance. These plans typically cover unexpected health expenses both during pregnancy and post-partum.

AXA Mum’s Advantage is our version of pregnancy insurance - it is a two-in-one investment and maternity protection plan, that can give mothers a peace of mind and security during the pregnancy journey, and provide a head start in building up savings for your child’s future, through investment in a variety of funds.

2. Early years of parenthood

The beginning of parenthood is also one of the costliest parts of parenthood, as there are many things you must do, such as getting post-natal care, getting your kids vaccinated, the consistent check-ups, and buying necessities for your child.

While breast milk may be the most ideal option, mothers have no control over how much they can produce and for how long. Also, some infants may not take well to breast milk. Hence, expenses necessities like formula milk and diapers are usually unavoidable, and you will incur them early in your parenthood journey.

Such products don’t come cheap. In fact, the cost is estimated at $25,200 for the first 4.5 years!

3. Education

The next most expensive cost incurred in parenthood – your child’s education. From pre-school till their university years, the cost of education can be really expensive.

School fees depend on the type of education received, be it public or private. For example, a public Nursery like My First Skool costs $770.40 a month (at time of writing). On the other hand, enrolment into a prestigious Montessori school can be around $4,300 a term, which is around $1433 a month!

Singaporean citizens are eligible for a basic subsidy that can help to take some financial burden off their shoulders. However, it may still amount to at least $470 a month for public nursery education fees.

Singapore citizens are also heavily subsidized for primary school education all the way to junior college, as school fees are almost free! Parents usually only have to pay for miscellaneous fees, which is a maximum of $13 per month for primary school students, and increases to $33 per month for pre-university students. Of course, this doesn’t include costs such as co-curricular and other class activities.

The financial pressure usually kicks in when your child goes to a polytechnic or university, which costs a few thousand dollars every semester.

One will also have to take into account the possible tuition or enrichment classes that your child may be getting, which can also add on to overall cost of education in Singapore.

Should your child decide to pursue an education overseas, the costs incurred are even higher since university cost in Singapore is already heavily subsidized for Singaporeans.

Hence, it is important that you start saving for your child’s education as soon as possible, giving yourself more time and less stress to save up.  

A savings product such as AXA Early Saver Plus may be something you would like to consider for this purpose. It is an endowment plan that provides a guaranteed return of up to 1.57% per annum, with guaranteed cash pay-outs in the last 3 policy years.

4. Healthcare

Healthcare is a basic need that everyone requires. Even before your child is born, you would have already incurred medical expenses by going through all the prenatal check-ups required.

Falling sick and trips to the doctors are common throughout most people’s lifetime, and with a life expectancy of 84.8 years, you might require medical service for many years to come. This does not include just falling sick, but also visiting the dentist, or any accidents that may occur.

In addition, healthcare costs are also rising. In 2018, the healthcare inflation rate was at 10% in Singapore. Should the trend persist, the costs of medical services in Singapore will only continuously increase.

Hence, making sure that your child has a solid health insurance plan is essential.

AXA Shield is our hospitalisation plan that is available for both adults and children. As a complement to the Singapore Medishield Life plan, AXA Shield provides coverage for inpatient or day surgery. AXA Shield is also guaranteed to be renewable as long as you pay your premiums, so it can cover you or your child throughout the rest of your lives.

Raising a kid in Singapore

Though starting a family may be overwhelming and financially daunting, it is doesn’t have to be! With proper preparation, you can relieve yourself of some financial stress and fully immerse yourself in the joy during the arrival of your new-born.

Disclaimer: This article is for general information only and does not take into account the specific investment objectives, financial situation or needs of any particular person. The views expressed herein do not necessarily reflect the views of AXA Insurance Pte Ltd and should not be construed as the provision of advice or making of any recommendation. There is no intention to distribute, or offer to sell, or solicit any offer to purchase any product. We recommend that you seek the advice of a qualified financial advisory professional before making any decision to purchase an insurance or investment product. Whilst we have taken reasonable care to ensure that all information provided was obtained from reliable sources and correct at time of publishing, information may become outdated and opinions may change. We are not liable for any loss that may result from the access or use of the information herein provided.