Getting ready for the baby

STARTING a family is an exciting time for any new parent, but it can also present some daunting questions and challenges.

The cost of providing education, let alone the cost of raising a child, is not cheap and it may surprise many people just how much money one needs to provide for a family.

Teaching children to be money-wise is also a smart move, not only to educate children on the value of money but to help them to become better savers once they are grown.

Building a new family is daunting, but ultimately a rewarding adventure, and with these tips, saving up should be smooth sailing.

NOBODY PUTS BABY

IN THE CORNER

Don't be fooled by the size of a newborn baby. Any seasoned parent will tell you that babies take up lots of space and time and money.

So be prepared to take these into account.

Sizing up what you need and prioritising your savings before the new arrival, is a good place to start says Eng Siok Tin, general manager of Wealth Management at Standard Chartered Bank.

"Good quality baby items can be expensive and the frustrating part is that they will grow out of it (quickly)," she says.

Making a list of the essential things you will need is a good start and can help new parents to understand how much good quality items such as baby car seats and prams or push chairs cost, and help you to size up your budget needs for these items beforehand.

"It is good to know how much these items will cost now rather than get a shock later," she adds.

If buying everything new will put you out of your financial depth, "pre-loved" items are a good way to get good quality items at a lower price.

"Many mothers will be happy to give the items to you or sell them to you at a cheaper price since they can't be used anymore. The items are rarely used because babies grow out of them so quickly so they are usually in great condition," says Eng.

Paying this forward by passing these items on to other friends or selling them off cheap after your baby has outgrown them is also good practise.

Don't be put off either by garage sales or car boot sales.

"Children grow out of their clothes so quickly that while it is nice to buy them new clothes for nice occasions, second-hand ones will do nicely for home wear," she says.

Jolene Lam, a resident of Bandar Seri Begawan, says she has no qualms about shopping for clothes or toys at car boot sales for her sons. "I know a lot of people in Brunei tend to think of second-hand items as old and pretty unhygienic, but with the rocketing prices of baby items and kids' toys nowadays, it's just becoming too financially difficult to buy new things every time they outgrow them or every time they want a new toy, which is often," she says.

STATUS IS IMPORTANT

SOMETIMES

Another way to ensure you're prepared for the arrival of your child is to change your status. This is not referring to Facebook or Twitter, but to your work status.

Most jobs will entitle you to maternity benefits and it's advisable to find out what exactly you are entitled to with the addition of your child to the family unit.

Eng says some organisations provide allowance or include dependents in insurance covers. "With a baby on the way, you may need to consider changing the beneficiary or adding on your child to the beneficiaries list of your insurance policy. It is more vital now than ever to ensure that contingency plans are made in the event of any unfortunate events. This helps to make sure that your spouse and child or children will be financially taken care of should anything untoward happen to you."

GETTING SCHOOLED

These days, parents are already thinking ahead of which school they want to send their children to and while some may think it is premature to do so when your child is not even one year old yet, it might actually be a good thing to plan ahead.

This helps to ensure that you are able to get a spot in the school of your choice.

Eng of Standard Chartered Bank says, "Parents have the choice to send their children to private or government schools, both of which have equally high standards of education in Brunei. For parents who wish to send their children to private schools, early homework on finding out how much monthly school fees are will help you to decide if you can afford to send them to your school of choice. Parents should have a list of options in case their preferred options are not realistically within budget."

HSBC also provides anxious parents with financial planning aid on education for children. According to the HSBC Brunei website, "Funding your child's education requires careful planning as you will be funding at least 18 years of education, from nursery school to university."

The website also advises parents on what kind of expenses should be taken into consideration when planning for their children's educational future. Tuition fees which include books, supplies, student activity fees, personal expenses, room and board, transport and medical insurance are some of the basics that any parents should consider in providing for a child's tertiary education, the bank said.

HSBC estimates on its website that an overseas college education (based on fees of popular universities in the UK and Australia, for 2006), will cost an average of $200,000 to $440,000. Parents should expect to shell out more though, taking into account inflation pressures and increase in tuition fees.

HSBC in fact estimates that based on inflation and increase in tuition fees, in 10 years' time the cost of tertiary education alone would cost parents about $590,000.

Eng says that parents may wish to invest in a regular savings plan which will help make their money work harder for them.

"Most banks have education savings plans that you can invest in. At Standard Chartered, regular savings plans are linked with investments thereby offering potentially higher returns on your savings than normal savings accounts."

She adds that in the event of the child being awarded a scholarship, parents can allocate the money saved for his start-up in life.

"It can go towards purchasing a new car or even to deposit on a house. Either way, having some savings allocated for them will no doubt go a long way to setting them up for a successful start in life," she says.

"It is never too early to plan ahead for your child's potential aspirations."

The Brunei Times