When there is a new arrival in the family, new parents may feel overwhelmed and unsure about whether they have prepared for everything their little one could possibly need. Here are five money mistakes, commonly made by new parents, which you should avoid at all costs.

NOT MAKING USE OF GRANTS GIVEN

Singaporean babies can benefit from the Baby Bonus Scheme (which includes a cash gift for all Singaporean children) and government matching to savings into their Child Development Account. This money can be used for their early education, medical bills, optical needs and other necessities from approved institutions.

Take time to read through the related government policies and create a plan for how you would like to use these grants and government support for your children’s development. You can find out more at this website https://www.babybonus.msf.gov.sg

OVERSPENDING ON UNNECESSARY ITEMS

Some parents find it hard to draw the line between necessities and novelty items for their little ones. Before buying those adorable shoes for your one-week-old baby who hasn’t even started walking yet, it would be a good idea to ask experienced friends and family for a baby checklist.

This will save you from overspending on unnecessary items and cluttering up your storage space in the long run.

NOT HAVING LIFE INSURANCE FOR YOURSELF

Your children are completely financially dependent on you and your spouse, so it is important to get life insurance.

Thinking about your own death is not a happy proposition for anyone. But as a parent, you need to ask yourself this “What if” question. Make sure that your family will be well taken care of and that your children’s education and healthcare will continue even if you are no longer there to provide for them yourself.

IGNORING EDUCATION SAVINGS

Education is the key to success, so it is important to start saving for your child’s future.

Committing to a structured savings plan will force you to be disciplined about setting aside money regularly for juniors’ tertiary education. Savings plans that are specially designed for children’s education are readily available from banks and insurers.

NOT BUYING HEALTH INSURANCE FOR YOUR CHILDREN

Many parents choose to save on the premiums for a health insurance plan. But the fact is, children do get sick. If we are lucky, it will be a mild cold or the occasional tummy upset. However, broken bones and hospitalisations are not uncommon among children.

The cost of medical treatment often comes unexpectedly and can be very expensive. It probably makes more financial sense to transfer the risk of that unexpected high cost to an insurer instead.

Start your new chapter with confidence. Be sure to avoid these financial traps so that you can focus on enjoying every moment of your journey with your precious little one. The memories you make along the way will prove priceless.

Find out how we can help you. Visit Aviva booth at Mount Alvernia Hospital, Level 1.

Republished from aviva.com.sg/money-banter

This article is taken from our My Alvernia Magazine Issue #41. Click here to read the issue on our website or on Magzter.