Being a professional in the financial industry has been an asset for Brendan Yong, 36, and his wife Janice, 33.
“From the outset, we started saving for the initial costs of having a child, such things as pre- and post-natal consultations, delivery charges, baby room renovations and other big ticket items,” says the financial services manager.
“We learned a lot about what we would need from friends who were parents before us.”
They even budgeted for emergencies during childbirth. Brendan and Janice also recognised that it made sense to save money on certain things such as clothes and toys.
“Our firstborn Eliaz, now 5, didn’t get many new clothes. We benefited from relatives with sons who had outgrown their clothes, and clients who gave us their kids’ toys. “It was not a problem for us – we didn’t have a stigma about hand-me-downs. It’s about being practical.”
Elnathan, their second child, now 3, inherited Eliaz’s stuff. “The second child incurs about 50 per cent less expenses compared to the first one, who needs many more new things.”
Having discussed their priorities, Brendan and Janice knew that having children naturally meant they would have to cut back on extraneous expenses such as going out with friends for a meal or shopping.
“Fewer expenses for us mean more savings.” For Brendan, planning for the future is a multi-pronged task. Saving is a must, as is investing (because saving does not protect you against inflation) even during rocky times – “as long as caution is exercised”.
Insurance, he says, is crucial. It is the cornerstone of planning financially for your children’s future. “I see it as a need to ensure that my family is taken care of for the next who-knows how-many years, should anything happen to me, until the kids can fend for themselves,” explained Brendan. “I am insured for $1.4m with $300,000 for major illness.
“Janice and I are assured of $1 million on each of us, and I’m only paying a little over $8,000 a year. “I guess everybody knows it’s good to start buying insurance when you’re younger as your premiums are lower.
“As for my kids, they have term policies and are also covered for critical illnesses and hospitalisation.” The 2009 economic downturn may have put a small dent in Brendan and Janice’s well-laid plans, but Brendan shares that it has made him “save more whenever I can, take advantage of tax breaks like CPF to reduce my taxes, and invest the rest as and when it’s viable.
“It also makes more sense for me to set aside a fixed budget to control spending instead of fixed savings. This means I have the flexibility to take advantage of any investment opportunities that arise.”
On the home front, costs are kept under control with smart measures. “My wife watches the utilities usage. Lately, we have been sleeping without the air-con on, and our bill has halved from $300 and we limit holidays to around the region like Hong Kong.”
Thanks to a lifetime of planning, Brendan and Janice are not facing much negative impact on their finances despite having two children. They are even planning for a third.
“Living next door to my parents was something we planned for too. It provides many benefits — we share costs, such as food bills, and economies of scale come into play as we get more variety at the dinner table.
“We also share one family car, and my wife and I have our private time while Grandpa and Grandma watch the kids!”
