The 2023 Policy Address has put in place a one-off cash bonus of $20,000 for each child born to a parent who is a Hong Kong permanent resident. While this bonus can give parents-to-be a good start on their parenthood journey, there is a lot more to consider financially when raising a child. Here are five financial considerations when preparing for a baby.
Review your household budget
Have an open conversation with your partner on your household finances, and discuss and agree how it can be adjusted to support the arrival of a new family member.
Be well-prepared as maternity and newborn-related expenses can have a significant impact on your finances. Make use of the IFEC Having a Baby budgeting worksheet to budget for the various items.
Accommodation
Consider if you will need to buy or rent a more suitable accommodation. Do you have enough room for your newborn and are you planning to hire a domestic helper? Would you be living closer to your parents so they can look after your child? Are there any suitable nurseries or schools nearby? If you have to move, you may even want to think longer term to be closer to the schools to avoid the cost of moving again.
Caregiving
Would your child be looked after by your parents or a domestic helper? Would it be feasible to become a full-time parent, and if so, how will it impact your family finances with one less source of income? By reaching a consensus with your partner on the caregiving responsibilities, and enlisting help from parents in advance of your baby’s arrival, you will be better prepared to budget and plan accordingly.
Education
Ongoing educational expenses can make up a sizeable portion of the household budget. Apart from the free education provided by the government, some parents may also consider the options of private, direct-subsidy, international schools, or sending their children overseas. In addition, playgroups, interest classes, and private tuition are also popular options. Parents can plan ahead and set up an education fund for their children's education.
Long-term planning
Be prepared to take on more responsibilities once you become parents. If you are the family breadwinner, life insurance for you and your partner, and medical insurance for your child, would be a key consideration. Moreover, parents should consider making a will as soon as possible for not only financial arrangement but also to appoint a guardian for children who are minors (below the age of 18).
