Tuesday, 13 November 2018

Pregnant? Here's how much money you may need to prepare from pregnancy to delivery and your baby's first year

Needless to say, being pregnant in Singapore isn't a cheap affair. There are many costs to think about, and the bills can easily add up, leading to stress over a lack of finances if you aren't prepared for it.

What should one expect to spend and save up for when you get pregnant? Here are some costs to think about (numbers are estimations based on my own pregnancy journey this year):

Pre-natal / Pregnancy costs

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Gynae visits ($1,000 - $3,000)
Each consultation will easily set you back by $100 - $300+ depending on whether you're seeing a public or private gynae, and how popular they are. Some offer the option to take on a package after your fourth month, which helps to save on consultation and ultrasound scan costs, but you'll still have to pay for your own supplements / medications.

Pre-diagnostic tests ($400 - $1,500+)
Most expecting mothers in Singapore would have to undergo three tests throughout the duration of their pregnancy:
  • Down syndrome test between 12 - 14 weeks (OSCAR is the cheapest but also has a higher rate of false positives)
  • Fetal assessment test between 20 - 22 weeks
  • Gestational diabetes test in your fifth month
Depending on which tests you opt for (especially to test for Down Syndrome), these can cost you anywhere from $395 - $1500+.

Prenatal classes ($300 - $1,000)
If you're going for prenatal classes (whether for exercise or for knowledge), these cost money too! Costs vary depending on the number of sessions and types of classes you go for, but expect anywhere from a few hundred to a few thousands if you're going with a branded or more well-known provider. My husband and I opted for a one-day intensive workshop at Thomson Medical.

Maternity clothes
Let's get real - you'll probably have to spend some money on new clothes to fit your growing bump, unless you're lucky enough to have friends who will give theirs to you secondhand (and provided that they fit!). You can read my consolidated budget tips here for maternity wear, but the key tips I would share is to stick with loose clothing for your first and second trimester, and then surviving your second and (the start of your) third trimester on clothes that are 1 - 2 sizes bigger. When you have no choice but to buy new clothes towards the last 2 months of your pregnancy, go for maternity-convertible-to-nursing outfits so that you can continue wearing them even after you've delivered your baby. I got 3 of such sets for work from Dear Collective, and the rest from ASOS Maternity when there were sales.

Delivery costs

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Hospital package ($2,000 - $15,000)

Whether you're going for a natural birth, scheduled Caesarean or end up with an emergency Caesarean, the costs rise in that very same order. If you're unsure how much you ought to expect, you can check out this really useful guide by MOH on the average bill sizes for delivery. Note that the higher rates doesn't mean that's the highest, because 1 in 4 patients pay more than the highest figure stated. In fact, my friend ended up with a $18,000 bill because while his wife initially opted for a natural birth, circumstances warranted an emergency C-section at the end. 

Your duration of stay, type of medical consumables and pain relief (laughing gas, spinal block, epidural, etc) will also bring up the costs (in that same order).

Gynae and other professional fees ($2,500 - $8,000)
Aside from the hospital fees, the other component in your hospital bill that has the most variation (because it depends on the professionals you pick) would be the professional service fees incurred by your doctor, anaesthetist and child's pediatrician. Your gynae will most likely charge you a fee per visit to the hospital, so if you're in labour for a really long time, there might be multiple visits to pay for. In addition, there will be a gynae fee for carrying out the delivery as well. Private gynaes charge different rates for different procedures so there's a huge range of costs to expect - check with your own gynae directly to get a better and more accurate estimate for you to plan towards.

Part of these costs can also be paid out of your Medisave (or your husband's):
  • Up to $900 for pre-delivery / prenatal expenses (so do remember to pack your receipts in your hospital bag for submission)
  • Between $750 - $3,950 for surgicial procedures ($750 for normal vaginal delivery, $1,250 for assisted vaginal delivery, and higher for c-section operations)
  • Up to $450 per day in hospital 

Insurance costs

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Maternity insurance ($350 - $550)

To protect against unexpected pregnancy or delivery complications, you can either save up more on your own, or opt for maternity insurance to offset these costs. There are generally two types of maternity insurance plans available in Singapore - the standalone plans and the bundled options. Make sure you pay attention to the conditions covered and the underwriting criteria. For a detailed study across price, coverage and exclusions, you may refer to my 2018 comparison table here for when I was shopping around for my own.

Insurance for yourself and your spouse 
With a new dependent, it is crucial that you and your spouse are financially covered so that lest anything happens to either of you, the insurer(s) will provide a payout that can then go towards covering your child's future expenses. Consider hospitalisation, personal accident, term / life with critical illness riders, and income replacement policies for a start. No cost estimates for this section provided because what and how much you choose to be insured for will affect your premiums paid, so it'll be best to seek advice from a financial adviser(s) and get quotes so you can decide what falls within your affordability.

Insurance for your child 
What insurance policies do you need to get for your newborn? In my view, hospitalisation and personal accident plans are absolutely essential, term/life plans are debatable, whereas endowment and ILP can be skipped provided that you'll do your own savings and investments. You can read more about each policy and its varying functions here, as well as which ones I recommend as must-haves vs. the good-to-have-if-you-can-afford-it. The premiums will also vary according to the level of coverage that you choose for your child, so there isn't any cost estimates here either.

Confinement costs

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Confinement lady ($2,800 - $3,500)
Who will be helping to look after you and your newborn baby (while also assisting on household chores and cooking) in the first month after you've delivered? For those who are lucky enough to have your parents or in-laws help out, then you might be able to save on the costs of a confinement nanny. If not, you can expect to pay upward of $2,800 if you get from a confinement agency like PEM, or $3,000 and above if you're going with a private nanny. 

If your baby comes during the Chinese New Year period, prepare to pay almost double of the price! My friend recently paid over $6,000 for his confinement nanny as his baby was born in February.

Confinement food ($800 - $1,800)
If you're getting a confinement nanny, she will be able to cook confinement meals for you as well, but you'll have to pay for the cost of groceries and ingredients. Otherwise, you can also cater ready-made meals from caterers like Tian Wei Signature or Thomson Medical for convenience because you probably won't have time (or the energy) to handle your own meals and ensure sufficient nutrients for recovery when you're so busy feeding and tending to baby in the first month.

Confinement herbs ($800 - $1,200)
There are herbs for consumption and herbs for bathing, usually obtained from TCM shops like Hock Hua or Thomson Medical.

Post-natal / jamu massage ($700 - $1,500)
After delivery, you'll most likely need post-natal massage to help "reset" your uterus so that your tummy will shrink, as well as potentially get a breast massage to help unclog blocked ducts and reduce engorgement. Depending on the number of sessions you opt for (usually 7 - 15 sessions) and which masseur you use, costs will vary accordingly. If you go directly with private and individual masseurs, please make sure you ask them about transport costs, binder costs and peak periods pricing, as many of them quote upfront without including all these extras. You don't want any surprises, do you?

P.S. I tried a few prenatal massages and eventually booked with Post Natal Singapore for mine as they offered the best value-for-money, especially if you purchase during a baby fair or roadshow where they give out pretty good discounts and freebies. 

Newborn-related expenses

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Cord banking ($5,000 - $10,000)
Will you be banking your baby's cord blood, cord lining or the entire cord? Is it even worth banking your baby's cord? I've written extensively about the need for cord blood banking, the pros and cons of donating vs. storing privately, as well as compared against the cost of storing among the different providers in Singapore. For the record, I decided to go with Cordlife for mine and have detailed my reasons in this blog post.

Breastmilk feeding expenses ($500 - $1,500)
Think breastfeeding is cheap? Not when you need to get breast pumps, milk bottles and teats, nipple balm, breast pads, etc. All these can add up to quite a bit! Expect to spend even more if you end up feeding your baby formula milk.

Baby items ($1,500 - $5,000)
Clothes, mittens, socks, swaddles, diapers, a baby cot, a waterproof mattress protector, a changing mat, a diaper bag, carrier, stroller, car seat, etc. I never knew such a tiny human being needed so many things until I conceived my own! Costs here can vary by quite a bit but there are also various ways of saving money, such as shopping through Taobao, getting hand-me-downs or buying secondhand from Carousell. Some mothers are willing to splurge $1,500 on just their baby cot alone (although I know of none personally except those who have been sponsored), so expect anywhere from $500 and up depending on your own preferences!

Vaccination expenses ($1 or up)
Here's a tip - you get the vaccines for free / at a highly subsidised rate if you go to the polyclinics instead of a private paediatrician. This is because all recommended immunisations under the National Childhood Immunisation Programme (NCIP) are free, thanks to MOH and government subsidies!

Paediatrician expenses (varies)
Depending on how healthy your baby is, costs for paediatrician visits can vary quite widely under this aspect as well. If you need repeated visits for fever, colic or other conditions, then you'll have to pay accordingly per visit and treatment.

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So how much should I save?!

That depends on how much you intend to spend, really, but start budgeting across the above categories and work out a rough budget that you'll need to start saving towards so that you'll be well-prepared. To outsource financial risks (hospitalisation, pregnancy complications, etc), look to insurance to cover that gap, unless you prefer to self-insure the entire sum by yourself.

As a rough gauge, my husband and I initially targeted $20,000 before we realised that some of our friends (especially those who ended up with an emergency C-section) spent close to that sum alone on their hospitalisation and delivery fees. Hence, we've since revised our baby budget to $30,000 to last us throughout pregnancy and the first 4 months of our baby's birth. 

Where to park my child's savings and government grant?
The POSB Child Development Account!

To help us save further on our son's medical, dental and hospital expenses after he's born, we'll be using our POSB Child Development Account together with our Passion POSB Debit Card which gives us 3% rebate for such expenses. I've reviewed this previously against the other CDA options in Singapore and felt that this was the best account for us to open to get our CDA grant of $3000 and also the government's matching of up to $3,000 (since this is our first child). There's also 2% interest p.a. with no minimum balance, which is relatively higher than many bank accounts that offer basic interest of 0.05% onwards.

You can also see my comparison here

We decided to go with POSB Child Development Account as it has:
  • 3% cash rebate on hospital, medical and dental expenses (the only one to offer this)
  • the best variety of merchant offers including baby essentials, Lazada, RedMart and more
  • we can also get a free infant flight on Singapore Airlines to travel with baby Nate next year!

Disclaimer: This post was written in collaboration with POSB, whom I approached after independently reviewing their CDA offering (here) and concluding that they were indeed the best in the market for my family and my baby.

Wednesday, 7 November 2018

Review of MoneyOwl - Singapore's first bionic financial adviser combining AI and human insights

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How many times have you sought advice from a "financial advisor" (i.e. mostly a glorified term for an insurance salesperson), only to be left sorely disappointed when they end up selling you insurance products (usually expensive / high commission plans)? You'll hardly find agents who tell you about "no commission" products that are actually great for various needs (eg. CPF-SA, Singapore Saving Bonds, Temasek Bonds, Astrea IV bonds, etc).

And so you try to DIY your own insurance through portals like CompareFirst, but you're also stuck because you cannot figure out if you're identifying your own insurance protection gaps correctly. As a result, you either end up under-insured (from DIY-ing wrongly), over-insured (if you listen to your insurance salesperson), or even worse, not getting insured at all (!!!!).

To try and address this problem, a joint venture was set up between NTUC Enterprise Co-operative and Providend Holding (which owns DIYInsurance). Their aim is to reach out to individuals and families who need to save and invest, but are currently being under-served by banks and financial advisers.

The result is MoneyOwl, which purports to be Singapore's first bionic financial adviser - where human wisdom and technology come together to deliver financial advice that integrates national schemes (like CPF, MediShield, ElderShield, etc).

MoneyOwl recently approached me to try out and review their platform, so here's what I think:

1. Suitable for both the clueless and the savvy insurance consumer.

Click on Find Out What I Need to fill in your profile and get a preliminary analysis from their AI robot technology, which employs an algorithm to identify your protection needs and provides recommendations on what type of insurance products you might want to look at getting (as well as giving you the top 2 cheapest quotes). 

If you already know your own insurance gaps and you're just looking to compare quotes, you can click on I Know What I Need to get started. That will bring you to this page:

Previously, consumers could compare on either DIYInsurance or CompareFirst (by MAS), but both portals were lacking in many areas such as having limited insurance products and a cap on coverage. If you wanted or needed anything else or higher, you would still have to go through an insurance agent to get the quote. I've reviewed both platforms previously here as well

And if you need to speak with a human for a second opinion or to ask more questions about the recommendations provided to you, you can opt to be contacted via phone, email, web chats or even meet up face-to-face with MoneyOwl's team of licensed advisers.

2. Your insurance needs are sorted by your profile and life stage.

This is even better than DIYInsurance's previous Self Check tool, which I reviewed here and provided recommendations on what needed improving on.

As most of you would know by now, I've hit 9 months of pregnancy and my baby is due
to be born anytime now, so I tried out this tool using my new status as a parent.

3. Your protection needs are determined by your life stage and number of dependents.

Regular readers will know that I'm in a tight spot because my husband and I have a pretty high number of dependents to look after - 5, to be exact - and we're alone in this. That number will probably grow to 6 soon because we're hoping to have a second child in the near future as well. 

As a result, we cannot afford to just save and invest - we need to turn to insurance to help mitigate the larger (potential) bills in the event of any unfortunate incident as well, otherwise a single large bill for either one of our dependents could very quickly wipe out our entire cash savings and assets.

4. You can fill up your profile, and it is pretty non-intrusive.

Don't you hate it when companies ask for private and intrusive personal information like your name and contact number before they reveal a quote / other information to you? You just know that they're using it as a tool to follow up later and sell you something! 

If you're such a consumer like me, then you'll appreciate how MoneyOwl doesn't require you to furnish them with personal identifiable details like your name or contact number. As long as you wish not to be contacted, you have the option to go through the entire process, get the recommendations and quote, and get out without worrying about a pesky salesperson calling you afterward.

But at the same time, if you do wish to be contacted and speak to an advisor for more details beyond what the tool is recommending you, MoneyOwl also allows you to create your profile and leave your email address so they can get in touch with you to either discuss further.

5. It not only identifies your insurance needs, but also allows you to add your existing coverage so that you can get an accurate assessment of what your remaining gaps are.

This was the coverage suggested for me:

And this is what I got after adding my existing insurance coverage:


The recommendations then showed me a few low-cost options which were ranked by the cheapest premiums. You also have the freedom to choose to buy through them, or through other means (eg. direct or through your own agent). If you buy through MoneyOwl, you get back 50% of agent's commission rebate (the remaining 50% goes towards the company's operational expenses and investing in R&D for the other modules).

My thoughts?

This is great and a huge game-changer for the insurance industry. I love the idea, the interface, and the fact that there's the option for consumers to speak with an adviser if they need additional support. After all, I still maintain that technology can never fully replace the empathy and emotional concerns that only a human adviser can relate to.

Of course, I'll be lying if I said their platform is PERFECT - there will always be room for upgrading, and I've since provided my list of recommendations for them in terms of (mostly minor) improvements they can work on. For instance, I spoke with their Chief Advisory Officer to ask if they would still recommend a term policy for someone who wants cash value back for all that premiums paid; the answer was that they will then educate the client on the difference between using term and whole life plans, but recommend whole life only if certain conditions are met. I like that, because whole life isn't necessarily a bad product per se (although it certainly does lose out to the buy-term-invest-the-rest approach most of the time).

Another point of contention I brought up was that ranking hospital plans by cheapest premiums isn't necessarily a good way because the cheapest for this particular type of policy does not always mean the best value-for-money. AIA hospitalisation plans, for instance, may be more expensive than NTUC Income, but that's because the pre and post-hospitalisation coverage that they offer are a lot more as well. MoneyOwl then told me this is where the client assessment with their human advisers will come into play.

Source: The Straits Times
Aside from insurance, you can see from MoneyOwl's website that they will soon roll out a digital will-writing service, an investment portfolio featuring low-cost funds, and a comprehensive financial planning service that will integrate national schemes like CPF and ElderShield. I'm excited to see these new roll-outs in the near future.

As most of you know, the biggest problem in the insurance industry is that there is little incentive for agents to recommend products with zero or low commission rates.

And is that really surprising, when agents rely on these commissions to earn a living? It is a well-known fact that commissions are fiercely guarded by the insurance industry - remember how in 2013 when 10 financial advisory firms pressured iFast Financial to withdraw insurance products from its Fundsupermart website which would have offered a 50% commission rebate to consumers?

As long as commissions continue to be tagged to agent recommendations, unbiased advice is but an idealistic dream that is mostly impractical in reality. 

There is a lack of competent and conflict-free advice today that helps Singaporeans integrate CPF and other national schemes into their financial plans, probably because advisers don't earn any money for such advice with commissions or trailer fees. MoneyOwl seeks to fill this gap. Their client advisers are purely salaried employees, who will not receive commissions or incentives based on products / amount of premiums / number of policies sold. This removes the conflict of interest and leaves them free to dish out financial advice that is fitting to the consumer, such as topping up CPF, buying the Singapore Saving Bonds, investing in low-cost index funds, etc.

The cost of the products that will be recommended by MoneyOwl will be low, mainly because the product providers either pay no trailer fees at all to the distributors, or at most a small quantum of commission. Such solutions are not popular in financial advisory plans offered to the mass market (obviously!).

Investments will come with no sales charge, much unlike the investments that your insurance agent tries to sell to you, or the unit trusts recommended by your banker. 

I love what I'm seeing on MoneyOwl thus far, and look forward to their other services and improvements in the near future.

Disclaimer: This post is sponsored by MoneyOwl to raise awareness about their latest revamp and offering. The review and all opinions written are that of my own. 

With love,
Budget Babe