Raising a child in Singapore can be very expensive.
Here are expert tips on how you can save more money, and spend wisely as a parent.
1. Reassess how much you’re spending on the kids
“I find that many parents waste a lot of money on extraneous activities and enrichment classes for their children,” says Andrea Kennedy, a certified financial planner and author of Own Your Financial Freedom.
“There’s nothing wrong with wanting your kids to be well-rounded, but ask yourself if they really need to be playing five different sports on top of attending art, music and dance classes every week.
“My advice is to be more focused. Set aside a certain amount of money every month for such activities and classes, and then decide how exactly to spend it.
"Look at where your children need help and utilise the money wisely. By the end of the year, you’d have saved quite a bit.”
2. Make it harder to access your money
“To have more money, you have to live within your means,” says Andrea.
“An easy way to do this is to put your savings into an account that has no debit or credit card attached to it. This will help curb any impulses to spend when you’re out and about, and force you to make do with the money that you can access.”
3. Budget – but make it easy and fun
Need more motivation to save?
Make the budgeting process easy, says Alfred Chia, CEO of Singcapital, a financial advisory company and author of Mortgage and Grow Rich Singapore Style.
“Budgeting can be simple and fun if you follow my 4-3-2-1 principle.
"Apply these numbers to your monthly salary – spend no more than 40 per cent on your loan commitments and no more than 30 per cent on your regular expenses, and put 20 per cent into your savings account and 10 per cent on insurance protection.
“This lets you see the ‘big picture’ clearly, and you will no longer have to agonise over where your money is going.”
4. Understand the difference between a “need” and a “want”
“It’s easy to want what everyone else has – think designer goods or a fancy new car, but ask yourself if you really need it. More often than not, the answer is no,” says Alfred.
“Every time you go shopping, even at the supermarket, question what you buy. If you don’t need the item, put it back. Over the year, these little costs will definitely add up.”
5. Review your mortage rates
When was the last time you did this?
You can save a substantial amount just by checking this out every three years, Alfred advises: “If you’re a homeowner, be careful of rising interest rates. A regular review will help you see if you’re paying too much interest."
"If so, consider refinancing your mortgage. You’ll save a bundle.”
This article was first published in Young Parents.