Becoming a parent is an exciting and life-changing experience. With the arrival of a new family member, your responsibilities and financial commitments grow.
To help you navigate the financial challenges of parenthood in 2024, we’ve put together a financial planning guide that takes into account the key elements of the National Budget.
The 2024 budget has introduced several changes that can affect your financial planning, so it’s essential to stay informed and make informed decisions.
How to Plan Your Finances Around the 2024 Budget
Service Tax Hike
The government is increasing service tax from 6 percent to 8 percent. And this may impact your spending.
While this hike excludes food, beverages, and telecommunications, it’s still advisable to review your monthly expenses and budget accordingly.
Look for opportunities to cut back on non-essential services to offset the increase.
Social Welfare Department Allocations
The allocation of over RM2.4 billion to the Social Welfare Department (JKM) to benefit more than 450,000 people, including hardcore poor households, elderly, children, and disabled individuals, shows the government’s commitment to social well-being.
While you may not qualify for these funds if you’re not in the B40 bracket, it’s a reminder of the importance of social safety nets in your financial planning.
Price Controls for Food Items
The government will issue a temporary lifting of price controls for chicken and eggs in 2024.
This means that the prices of eggs and chicken may increase. However, wholesalers cannot indiscriminately increase prices without a good reason.
To help reduce costs, be sure to use websites like Hargapedia or iPrice to compare prices between different supermarkets and brands. Yes the prices of eggs and chicken will differ between different retailers.
Floor Price of Rice
The increase in the floor price of rice to RM1,300 per metric tonne is aimed at boosting farmers’ income.
While this may have a minimal impact on your day-to-day expenses, it is a sign of the government’s commitment to supporting the agriculture sector, which can indirectly benefit consumers in the long run.
So you may want to find alternatives to rice if you want to save some money.
Income Tax Exemption for Childcare Allowances
The government’s will increase the income tax exemption from RM2,400 to RM3,000 for employers who offer allowances for childcare for staff is a significant benefit for.
This may be a welcome relief for working parents across the country.
This initiative will encourages company to support their employees with childcare services, providing new parents with more flexibility and financial relief.
PTPTN Loan Repayment Discounts
Parents with leftover PTPTN loans will benefit from this allocation. The government will provide discounts for PTPTN loan repayments from October 14, 2023, until March 31, 2024.
Take advantage of this opportunity to reduce your loan burden and allocate the family funds toward your child’s future needs or for rainy days.
Tax Relief for Sports Equipment and Activities
Keeping your kids and yourself healthy is important for every parent. Having kids is no excuse to skip the gym.
The increased tax relief limit of up to RM1,000 for the purchase of sports equipment and activities is a welcome addition.
It encourages you to invest in your child’s well-being while enjoying a tax benefit.
Luxury Goods Tax
Be mindful of the increase in luxury goods tax from 5 percent to 10 percent on high-value items like jewelry and watches.
While these items may not be a top priority for new parents, it’s essential to consider the impact of such changes on your long-term financial goals.
Other luxury items not mentioned may also be on the chopping block so beware. Opt for cheaper dupes.
Allocations for Subsidies and Incentives
The government is allocating a total of RM58.1 billion for subsidies, incentives, and assistance. Nearly half of it goes towards controlling prices of goods and services.
This can provide some relief to new parents.
Keep an eye on available subsidies that might help you save on essential items such as childcare, education, and healthcare.
Plan Your Finances Wisely for 2024
The 2024 National Budget brings both opportunities and challenges for new parents.
To make the most of the budget’s provisions, it’s crucial to review your financial plan, adjust your budget, and consider how you can benefit from the various subsidies, tax reliefs, and incentives.
As a new parent, staying informed and planning wisely will help you secure a brighter future for the coming year.
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