Rather than spend the precious little time we have outside of work on planning finances (because as we all know, there’s no such thing as “free time” for any parent), we tapped onto the minds of three financial advisors in our parent community to share how they plan for themselves and their clients.
The Mumsclub community is a supportive community that walks every step of the way with you in your parenthood journey. Share your knowledge and expertise with us! Reach out at [email protected] to let us know your interest to contribute. Parenthood is tough; and we’d love for you to actively be a part of the community today.
Give us a little introduction of yourself
Quincy: Hello I’m Quincy. I used to chase a small white ball around a big grass patch, now I chase 2 noisy toddlers, ages 4 and 1, around a small house.
Lizhen: I am Lizhen, 33 this year, working mom to two boys aged 6 and 2. Currently I am working with Aviva Financial Advisers as an Executive Wealth Manager, for 4 years and I have more than a decade of experience in the industry. Previously from a tied agency, I am now able to provide a full suite of products ranging from business to general and life insurance and investments via the 9 companies that I represent.
My career has been a life journey, as I’ve seen my clients ORD to having families of their own, mature couples being done with kids’ education and planning for their own retirement. We grow together, share our struggles and derive solutions to make life in future, a better one.
Angelina: Hi, my name is Angelina. With only 24 hours a day, and like many working women, I am fully occupied with 2 jobs; being a hands-on Mum as well as a Family Financial Planner and Retirement Specialist.
My hubby and I have 2 awesome kids who mean the world to us. My first born is a boy (15 years old) and my youngest is a girl (12 years old).
What advice would you give to a parent who is experiencing significant financial burden; and has to be very strategic in his or her budget for financial planning?
Quincy: One thing that I try to do, with the limited budget that I have, is to make sure I set aside funds for the must-have before I consider the like-to-have. Kids’ education and securing our retirement is definitely a priority.
Lizhen: As a parent myself, I make sure that my spouse and I are self-sustainable. Long gone were the days where kids will have to shoulder the responsibility of our old age. If we parents can take charge before the kids are grown-ups, we can have more years to plan and achieve our desired retirement goals.
Of course, I definitely would not mind if my kids were to give me some ‘allowance’ but I would just treat it as a bonus, as I foresee that the future generations will definitely have higher cost of living compared. With that being said, avoid spending all you have on the kids and regret when you are not being compensated. Split into needs, wants and have alternatives. Allocate budget to each expense and work within the budget, this will save you some money and with some effort, you can get to know a lot of ‘lobangs’.
It’s important to make sure that basic insurances are covered like hospitalisation and accident coverage for the whole family.
Alternative tips: go for restructured hospitalisation coverage and family package accident plan as they are more wallet friendly.
Life insurance coverage for parents and education planning for kids will come in after the basics are done up. We have to protect our kids and spouse from being vulnerable in unfortunate situations by protecting ourselves and getting covered.
Alternative tips: Something is better than nothing, so go for term plans that are lower in premiums and then convert when budget allows as most term plans will have a convertible option.
Angelina: With a family of 4, there is always a constant need to plan and allocate our limited budget for the family which includes our daily expenses, meals, educational fees, holidays and fun family activities plus periodic ad-hoc wants. In addition to all these, an important role for me is to make sure that my family is protected financially in times of crisis and for us all to maintain our lifestyle when things happen. “Don’t leave anything to chance and protect your family within your means” is always my main rule in financial planning for the family.
What do you believe is the greatest worry in terms of finances that modern parents have these days? How would you advise them to address that specific concern?
Quincy: Being distracted. There’s so much “noise” out there that can throw us off our path and before we know it, we’ve strayed off course. Stick to the fundamentals, that will be your guiding compass.
Lizhen: Three main concerns for modern parents with regards to their finances are, their children's education, retirement and being the sandwiched generation (if applicable). With much emphasis on children education and spending so much for enrichment class, it’s also important to set aside the big university bills.
Being a helicopter parent myself, I would want to be there to support my children as far as they can achieve. Even if they didn’t manage to use for education for whatever reasons, these fundings will add to my retirement funds (we definitely have to retire someday!).
While it’s important to plan for positive retirement goals, we must not forget the snowball expenses when long term care needs arise. Lobang tips: there are insurers providing plans for disability coverage and premiums that can be fully/partially funded by Medisave!
For the sandwiched generation, it would be important to ensure that parents hospitalisation and accident coverage are done up. There are coverage that allows maximum entry age up to 75 years old. These will cover the various costs, from retrofitting of home safety bars to specialist and TCM treatment. (Note, this cannot to be abused for monthly massage sessions!)
Angelina: Some of the common situations that I have encountered is the thinking that insurance coverage for kids is not important. There is a mindset that kids are stronger and less likely to fall very sick.
From my very own experience, I was able to share with them about my youngest child who was diagnosed with childhood Leukaemia at the age of 3. Treatment lasted 3 years and the medical cost added up to about SGD300k. I am extremely grateful to the Doctors who saved my little girl. However, I’ll like to say that insurance protection did it's part too. Most of her medical bills were covered by her insurance plans that we have started for her from birth and that alleviated both a big financial and mental burden for us.
Financial planning for the family is important regardless of age. Start as young as possible and you can also save more on premiums when you start early and healthy.
How much should parents set aside for savings and investment?
Quincy: It really depends on your life stage and needs. The ballpark is about 20% of whatever you earn. As said before, do save and invest, but do treat yourself and your loved ones every now and then. After all, it’s the memories created that mean more than the constant chase for the dollars and cents.
Lizhen: The rule of thumb would be to save at least 20% of income monthly. In the bulk of the savings, allocate 3 months of income or 6 months of expenses as emergency cash and invest the rest. Hard facts: banks don’t pay well for our hard-earned money. Make the hard-earned money work harder for you, grow it further!
I acknowledge that each family has their own needs, wants and goals to achieve. There is no best plan in this world but together we can make magic to craft and tailor fit the needs of individual families. That’s the little skills and expertise that I can share with families who allowed me to hop onto the journey with them. I listen to their stories and craft out solutions holistically.
Angelina: Different people save or invest for different purposes. It could be for education, buying a new house preparing for retirement, and many other reasons. We must determine our purpose, set out our financial goals and develop a plan before we are able to establish how much we would like to set aside. The key is to start, even if it is a small amount, as time can truly be your ally and friend when it comes to wealth accumulation.
How to contact us?
- Quincy - 9821 5118
- Li Zhen - 8102 9981
- Angelina - 9478 9947