How to Financially Prepare for a Child

By Marife Remo

How to Financially Prepare for a Child
Preparing for the arrival of a baby is one of the most exciting stages of family life. A new bundle of joy always brings a ray of sunshine into the home and inspires parents to strive harder. A smile that melts hearts, the first word, the first few steps trump all the sleepless nights and maybe even the financial uncertainty of bringing a child into this world. 

Financial preparedness is often overlooked when deciding to have a baby. Immediate financial adjustments such as funds for baby supplies are easy to accommodate, if you have the resources. On the other hand, long term financial planning is a great tool to help ensure that providing the best life possible for a child (and the whole family) is not a far-fetched dream.

For first-time parents, it may be taxing to look into the future as early as the pregnancy phase. It helps to break down the stages of a child’s life to help parents ease into the steps of financial preparation that would cover until the end of education. 


Birth to 3 Years

Baby Supplies

Breastfeeding is not possible for everyone. In that case, the grocery budget should be able to accommodate formula milk starting at PhP700++ for an 850g can, which usually lasts for up to five days. Diapers, toiletries, and baby grooming needs can also take up a big chunk of the budget. Acquiring gears such as strollers and car seats is a choice between saving up for premium quality gear or scouring parenting forums and groups for second-hand items that are in good condition. 

Health Insurance Coverage

For employed parents, most HMO policies automatically cover natural born or legally adopted children. If not, some companies allow additional beneficiaries for a cost. It is best to discuss options with the human resources department of the company. For those who are not employed, doing freelance work or running a business, there are many health insurance companies to choose from.
 
Childcare 

Depending on the agreed set-up between parents, childcare options can include hiring a nanny, having a relative care for the child (grandparents for most) or a parent staying at home. Whichever the choice is, all come with varying costs, plus the pros and cons.
  
Life/Disability Insurance 

In case of unexpected circumstances, having an insurance policy protects the family income like FWD Philippines’ Set for Tomorrow plan, which provides financial solutions for your ever-changing financial protection needs. Unforeseen events can make a financial burden if unprepared—doubly hard when there is a little one to care for.  


4 to 12 years

Preschool 

How to know when a child should be sent to school already? A child who is showing signs of school readiness and interest in learning can be enrolled to pre-kinder programs for socialization and other basic skills. Private preschools in the metro offer programs that can go as steep as PhP100,000. 

Enrichment Lessons

Some of the more popular supplementary activities include music lessons, art workshops, and sports clinics such as swimming, basketball, soccer, etc. Swim lessons for young ones usually start at PhP5,000 for 10 sessions. Sending kids to enrichment classes can also be a good investment for parents. 

College Education

With school tuition increasing every year, it’s a good idea to start planning for college funding early. Creating a financial strategy for education will help parents identify issues and concerns when it comes to the income generating capacity of the family. Acquiring a pre-need plan suitable for education like FWD Philippines’ Set for Life plan, a viable financial product to help you save up for a child’s future.
  
Needs and Other Expenses

Raising a child also means rising expenses. Clothes will be outgrown and food preferences will change. A child’s needs will be on top of a household’s expenses for years to come. The need to have their own money or allowance will also pop up in the latter years of this stage. If a child is taught how to save up, he or she might be able to take care of some wants and needs using money from savings. 

   
13 to 18 years

Education and Other School Expenses

Public or private education? It all depends on the quality. In the Philippines, some public schools with a specialized science curriculum are on a par with other prestigious private schools when it comes to quality. Regardless of the choice, school years will always keep the budget up with small expenses such as PE uniforms, projects, field trips, social events, and more. 

Electronics and other materials

Jumping on the electronics bandwagon is inevitable for children these days. Most schools are now utilizing the convenience of online learning portals, thus the need for personal computers, printers, and even tablet computers. It is best to help kids distinguish between wants and needs when talking about electronics purchases. 

Road to Adulthood 

Learning how to drive a car is one way to introduce a teenager into adulthood. While responsible driving can be learned, accidents can still happen. But the good thing is, a parent can opt to add a teen driver to the car insurance policy, which also increases its premium. 

With the list of budget considerations above, parents can now look into their preferences on upbringing and their child’s needs to be able to create a financial plan tailored to the family’s goals for the future. 

Marife is a freelance writer/copywriter specializing in advertising and marketing. But really, just tell her what you need and she’ll try her very best to come up with something interesting. She is a mom and wife 24/7, a Netflix junkie, meme lover, and a cat person who does not own a cat.