New Baby Steps

2013 sees another round of government incentives been rolled out to encourage more married couples to have more children so as to ensure the long term economic viability of Singapore. Baby Bonus Scheme, which was introduced on 1 April 2001, supports parents' decision to have more children by helping to lighten the financial costs of raising children.

It consists of two components

1. A cash gift; and
2. A Child Development Account.

Cash Gift

As part of the Marriage and Parenthood Package 2013, the cash gift quantum for children born on or after 26 August 2012 will be increased and the payment schedule will be revised and shortened. Parents will get a cash gift of up to

• $6,000 each for their 1st and 2nd child; and
• $8,000 each for their 3rd and 4th child.

The cash gift will be disbursed in 3 instalments to help parents defray the new or additional expenses arising from their newborn:

• 1st instalment (50% of the amount) within 3 week after completed forms were received;
• 2nd instalment (25% of the amount) when the child is approximately 6 months of age; and
• 3rd instalment (25% of the amount) when the child is approximately 12 months of age.

Child Development Account (CDA) for children eligible for Baby Bonus

The CDA is a special savings account that the parents can open at any branch of

• OCBC Bank or
• Standard Chartered Bank

for their child who is eligible for CDA. They can save in the CDA any time until 31 December in the year your child turns 12 years of age.

The Government will match the savings dollar-for- dollar in the following month up to the cap of:

• $6,000 each for the first and second child;
• $12,000 each for the third and fourth child ; and
• $18,000 each for the fifth and subsequent child.

The savings in the CDA may be used to pay approved expenses for all the children at Approved Institutions registered with the Ministry of Social and Family Development (MSF) under the Baby Bonus Scheme. These include:

• child care centres licensed by MSF;
• kindergartens and special education schools registered with the Ministry of Education (MOE) or the Council for Private Education (CPE);
• early intervention programmes registered with the National Council of Social Service (NCSS) or the Centre for Enabled Living (CEL);
• healthcare institutions licensed under the Private Hospitals and Medical Clinics (PHMC) Act;
• pharmacies registered with the Health Sciences Authority (HSA);
• optical shops registered with the Accounting and Corporate Regulatory Authority (ACRA); and
• assistive technology devices providers registered with ACRA or known to either the Ministry of Health (MOH) or CEL.
• purchase MediShield or Medisave- approved private integrated plans for all children.

How do we welcome our children into the world of money?

Reading young children stories with financial concepts and discussing money matters can help children learn about money and become responsible money managers. Reading books and talking with children about resource management topics during the early, formative years is ideal because this is when life habits and skills are developed.

In Numis Academy, we feel it is very important to teach young children about financial matters. One reason that parents do not teach their children about money, is because they are not sure they know how to handle money either. It is one of the things that is not always taught in school. We earn degrees in order to earn a living but are not always taught how to handle the money we earn.
It is important to start teaching children about money when they are young. You can use the world as your financial classroom. Real life triggers lessons you want to teach your child, and since you are probably handling money regularly in front of your child, stop and take two minutes to explain what you are doing.

In the book “Money Doesn’t Grow on Trees” by Neale S. Godfrey there is a story about a father and his son. He had taken his children on a trip across the country to see their grandparents. Everytime they stopped to eat, one of the sons was always straggling behind. Finally, when they were almost home, the father asked him why he always late. He said he was picking up the money his dad kept forgetting on the tables. The father then realised that his son was picking up the tips he had left behind and misunderstood that he had forgotten his money.

Another big issue, is teaching the difference between wants and needs. We know when you are a child it is hard to know the difference, but if we don’t teach them when they are younger, it is harder when they are older. That is part of the problem how people spend money now. They grow up not knowing the difference between real wants and needs. Then get into trouble with debt because they feel like they deserve anything they want.

Lastly, there is a need to teach them “the three Ss”:
Saving - Putting some of their money aside so it’s there to protect them in the future.
Spending wisely - Living within their means and being educated consumers.
Sharing - Being generous and charitable.
In conclusion, it is important to expose young children to vital financial concepts to start them off on the right track towards their future money management lifeskills.