7 things to include in your budget

It's about 2 weeks into 2020 and everyone is ringing in the new year with resolutions, goals, and budgets. When the Malaysian Ministry of Finance issued the much anticipated Belanjawan 2020 (Budget 2020) of RM 297 billion, it fell short of RM 17.5 billion as compared to the previous Budget 2019.

However, Malaysians can rejoice as there are a variety of new incentives introduced for the year 2020. Let's take a look at the things that might affect you positively in your finances this 2020.

1. Incentives for unemployed graduates. 👨🏻‍🎓

Under the Graduates@Work initiative, unemployed graduates (for more than 12 months) will receive an incentive of RM500 per month for 2 years for securing a job. The Ministry of Finance (MOF) decided to make this a win-win situation by giving employers an incentive of RM300 per month for each new hire for 2 years too! All incentives will be credited to your respective Employees Provident Fund (EPF) a.k.a Kumpulan Wang Simpanan Pekerja (KWSP) account.

2. The introduction of Rent To Own (RTO) financing scheme. 🏠

We know the value of properties has rocketed sky-high over the years making even the 10% downpayment a hefty lump sum. That has contributed to the decline in homeownership with our current generation.

To help more Malaysians own homes, the government has joined forces with financial institutions to introduce the RTO scheme. The RTO scheme is designed to help individuals purchasing homes priced up to RM500,000. The concept is simple, you'll rent the property for up to 5 years, then after you will have the option to purchase the house based on the price fixed at the time the tenancy agreement is signed. That's it.

Bonus: The government will also provide stamp duty exemptions. 🎉

3. Save more money with the reduction of toll charges. 🚗

There's no need to hide the joy in knowing you'll be paying lesser for tolls. The Malaysian government announced a minimum reduction of average toll charges by an 18% discount across all PLUS highways. That's going to save highway users a whopping RM1.13 billion this year! 😱

That's not all, the introduction of the congestion charges will be lowered by up to 30% of the present toll rates during near peak and normal hours. During off-peak hours the toll rate is FREE. This will provide savings to the highway users nearly RM180 million a year.

Bonus: This Chinese New Year, if you're travelling to Penang to celebrate the auspicious festivities, take note that the toll rates for cars at the Second Penang bridge will be reduced from RM8.50 to RM7. More savings, yay! 🎉

4. Incentive and tax exemption for women who return to the workforce. 👩

For the ladies aged between 30 and 50, this is for you. If you've been out of work for more than a year and thinking of making a comeback, you should. Here's why: under the Women@Work initiative, you will be given a salary incentive of RM500 per month for a period of 2 years if you return to the workforce. There's also a corresponding hiring incentive for employers where they will also receive RM300 incentive per month for 2 years for hiring.

Bonus: That's not all. The current income tax exemption for women who return to work after a career break will be extended until 2023.

5. You can get a professional cert through EPF withdrawal. 📜

Thinking about levelling up your professional skills but don't have sufficient resources? Fret not, the EPF has set out to expand the scope of its education withdrawal for qualifications attained at certificate level relating to the Fourth Industrial Revolution (IR4.0).

6. The minimum wage has been raised. 💰

The issue of minimum wages has often been a subject of debate. Post discussion and review, the Malaysian government has set the minimum wage at RM1,200 for those living in major urban centres, a RM100 increase from the previous RM1,100. Although it's not a significant increase, it's a starting point. Perhaps, we'll hear more announcements like this in the future. Who knows?

7. Housewives can opt-in for EPF contributions. 💁

You read the title correctly but how does this work? Basically, husbands can voluntarily elect to contribute 2% from his 11% EPF employee contribution to their wife's EPF account under the i-Suri (for spouse) initiative. Husbands, it's time to show your ladies some extra love.

Now that you've read this, remember to update your budget to reflect some of the changes above that might affect you. Got some budget tips you'd like to share? Drop us a comment below.