Key Points
· Some parents put themselves under undue financial stress as they set an unfeasibly high target to provide $2,000 a month in outlays for each of their children. They believe that $500,000 is needed to raise a child from birth to age 21. By legal benchmarks of child maintenance, $2,000 or more a month is usually made only if the parent earns more than $15,000 a month.
· A recent survey by Singlife found that 40% of people in Singapore believe that having a child will delay their retirement by 14-15 years. As a result, half of those without children will avoid becoming parents, while 80% of those with at least 1 child said they would not plan to have more.
· Some parents over-indulge their children by paying for their overseas education. Some even had to fight over monthly maintenance and sell off their assets as they became cash-strapped after sending their children overseas.
Implications
· It’s only natural for every loving parent to strive to give their children the best luxuries life have to offer. However, children can also grow up healthily and have a fulfilling childhood while using hand-me-downs and/or regular-price non-branded items. What matters more would be the amount of meaningful time busy parents spend with them to create happy memories and a healthy environment to grow up in. After all, children remember the experiences they had (and the feelings they felt) more than the tangible things they were given.
· Parents have to be selfish first before they can be selfless. Taking care of their own retirement needs supersedes providing for an overseas education for their children, especially when Singapore’s universities are ranked among the best in the world. This way, parents do not become a financial and moral obligation for their adult children in an ever-expensive inflationary world.
· It is vital to spend within one’s means. A balance has to be stuck between retirement and education planning. Fortunately, with mindful planning, CPF and other private investments can be a useful tool to fund one’s retirement expenses.
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Information accurate as at 2 Feb 2025. This advertisement has not been reviewed by the Monetary Authority of Singapore.
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