Lessons from Money not Enough Movie 1, 2 ,3

 "Money Not Enough 1,2,3" is a Singaporean comedy film. The movie addresses various financial struggles and challenges faced by the average Singaporean family. Here are some lessons that can be gleaned from the film:

1. Financial Challenges Are Common:

   • The film highlights the financial struggles faced by an average Singaporean family. This resonates with many viewers, emphasizing that financial challenges are part of the shared human experience.
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2. Importance of Financial Planning:

   • The characters in the movie grapple with financial issues due to lack of planning. The importance of setting financial goals, budgeting, and saving is a central theme. Planning for the future can help individuals navigate economic uncertainties.
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3. Balancing Work and Family:

   • The characters in the film struggle with balancing work and family life. This reflects the real-world challenges faced by many individuals trying to provide for their families while maintaining a healthy work-life balance.
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4. Impact of Economic Changes:

   • The movie depicts the impact of economic changes on individuals and families. Economic downturns, job losses, and changing market conditions can have profound effects on people's financial stability.
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5. Support Systems Matter:

   • The importance of family and friends as a support system is evident in the film. Emotional and financial support from loved ones can help individuals navigate tough times and build resilience.
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6. Education and Skills Enhancement:

   • The characters in the film face challenges in the job market due to changing industry demands. The importance of continuous education and skills enhancement to stay relevant in the workforce is a key takeaway.
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7. Living Within Means:

   • "Money Not Enough" underscores the importance of living within one's means. Keeping lifestyle expenses in check and avoiding unnecessary debt can contribute to financial stability.

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9. Adaptability and Resilience:

   • The characters demonstrate the need for adaptability and resilience in the face of financial setbacks. Being able to pivot, learn new skills, and persevere during tough times is crucial for financial success.

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11. Investing Wisely:

    • The movie subtly touches on the idea of making wise investments. While it doesn't delve deeply into investment strategies, the concept of financial growth through smart investment decisions is implied.

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13. Long-Term Perspective:

• "Money Not Enough" emphasizes the importance of taking a long-term perspective on financial planning. Building wealth and achieving financial goals often require patience, discipline, and a focus on the future.

Mi and my wife went to watch Money Not Enough III on my birthday. We really enjoyed the movie and we were moved to tears as well. Although this is the 3rd series of Money Not Enough, we cannot get enough of it. The actors have improved leaps and bounds from the 1st 2 movies of Money of Not Enough.

Dave ramsey 7 baby steps. How to apply it in Singapore?

 Dave Ramsey's "7 Baby Steps" is a financial plan designed to help individuals achieve financial freedom and build wealth. While some of the steps may need to be adapted for the specific financial landscape in Singapore, the principles can still be applied. Here's how you might interpret and apply Dave Ramsey's 7 Baby Steps in a Singaporean context:

1. Baby Step 1: Save $1,000 for an Emergency Fund:

   • Establish an emergency fund in Singapore dollars to cover unexpected expenses. This fund acts as a financial buffer, preventing you from relying on credit in times of need.
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2. Baby Step 2: Pay Off Debt Using the Debt Snowball:

   • List your debts, excluding your mortgage, from smallest to largest. Focus on paying off the smallest debt first while making minimum payments on the others. Once the smallest debt is paid off, roll that payment into the next smallest debt, creating a "snowball" effect. This method helps build momentum and motivation.
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3. Baby Step 3: Save 3 to 6 Months of Expenses in a Fully Funded Emergency Fund:

   • Expand your emergency fund to cover 3 to 6 months' worth of living expenses. This larger emergency fund provides greater financial security and ensures you can weather more significant financial challenges without going into debt.

Take a pause here and take stock before you go Baby step 4 to 6 as it is concurrent.

The first 3 baby steps is to take a hard look at your finances. What is the amount of money that you are bringing per month? What is the expenses that you have per month? At the end do you have more money coming in then going out? This is critical as if you have less money coming in then going out, it shows that you have a earning issue which you need to tackle or reduce your expenses so that you have money left over after the expenses. Without this in place, you should not proceed further. Some people take years to go beyond baby step 3.

1. Baby Step 4: Invest 15% of Your Household Income in Retirement:

   • Contribute 15% which in Singapore is 20% of your income to retirement accounts. In Singapore, this may include your Central Provident Fund (CPF) contributions and other retirement investment vehicles.

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3. Baby Step 5: Save for Your Children's College Fund:

   • Begin saving for your children's education. Consider using education savings plans or other investment vehicles available in Singapore to fund their higher education expenses.

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5. Baby Step 6: Pay Off Your Home Early:

• Work towards paying off your mortgage early. Allocate extra funds towards your mortgage payments or consider refinancing to a shorter loan term if possible.

Take a pause here while you take stock of the baby step 4 - 6.

If you have children, it will be good to consider their college fund (Polytechnic or University in Singapore) as the primary and secondary school are free education for all Singaporeans. If you do not have children. You can just focus on baby step 4 and 6. Once the house is fully paid off, you can be considered a millionaire in Singapore context as the homes in Singapore has been ranging up for the past few years where the new BTO can go up to $700k+.

1. Baby Step 7: Build Wealth and Give:

   • Continue building wealth by investing, saving, and giving back. Focus on growing your net worth, supporting charitable causes, and enjoying financial freedom.

How to save tax for working professionals in Singapore

 Working professionals in Singapore can employ various strategies to optimize their tax situation. Here are some practical tips to help save on taxes:

1. Contribute to CPF (Central Provident Fund):

   • Maximize your CPF contributions, as both employee and employer contributions receive tax relief. This not only helps with retirement savings but also reduces your taxable income.
   • The maximum contribution is capped at $37,740 which is about $20,400 contribution max for working professionals. This is capped at salary of $102,000 per year.
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2. Supplementary Retirement Scheme (SRS) Contributions:

   • Consider contributing to the SRS, which provides additional tax relief. The contributions are subject to a cap, and the funds can be invested for potential returns. Currently the cap is $15,300 per year whereby you can tax relief. The drawback is you can only draw the money without any tax when you reach 63 years old. Once you reach 63 years old and draw the money out from your SRS account, only half of the amount are being taxed. Currently the first $40,000 you withdraw from SRS is not subjected to any tax. Take note though once you start drawing out from SRS account, you need to draw out all the money within 10 years time. Meaning if you draw out in year 2032, you have till 2041 to complete drawing all your money from SRS.
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3. Claim Personal Reliefs:

   • Take advantage of personal income tax reliefs, such as the Earned Income Relief, Course Fees Relief, Parent Relief, and Handicapped Parent Relief. Evaluate your eligibility for each and claim accordingly. My Mum stays with me and she is not working. I gain additional relief.
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4. Utilize Parenthood Tax Rebate:

   • If you have children, benefit from the Parenthood Tax Rebate, which offers tax relief for each child. This can significantly reduce your overall tax liability.
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5. Donations and Philanthropy:

6. • Make charitable donations to approved institutions to claim tax deductions. This not only benefits the community but also provides tax relief for the donor. You can enjoy 2.5 times for every dollar of donations. Meaning for $100 donations, you receive $250 tax relief.
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7. SkillsFuture Credit:

• Utilize SkillsFuture Credit to enhance your skills. While it doesn't directly save on taxes, it can contribute to your professional development, potentially leading to increased income. There is cap though $2,500 per year for courses taken which you need to keep the receipt.
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9. Tax Relief Example :

10. The max tax relief is capped at $80,000 per year in Singapore excluding the donations. Take for example a household of 5 people, grand parent, parents and 2 children. Reliefs that the parent can enjoy assuming only 1 working parent.

Salary CPF contributions : $20,400 (Doing it in total by 31st Dec 2024)

Medisave contributions : $3,000 to $4,000 (Doing it by 1st Jan 2024 and whenever any deduction of medisave from medishield life or insurance)

Special account or RA account contribution : Capped at $8,000 per account if FRS is not or RA is not met (By 31st Dec 2024)

SRS contribution : $15,300 (By 31st Dec 2024)

Child care relief : $4,000 per child if child is under 16 years old

Parent relief : $9,000 per parent if parent is not working

Earned income relief : $1,000 (Age 55 and below)

NS man relief : $1,500

Donations : $400 ($13 contribution per month)

Total reliefs will be around $70k+

Depending on the income earned, the tax bracket for the 1st $40k payable is $550 and the next $40k is @ 7% which is $2,800. If the professional is getting an annual income of $150k, the tax that professional will be paying will be $3,350, without the reliefs, will be paying up to $10k+