Why topping up my CPF won't reduce my tax

It's going to be the end of the year, and there are many who are topping up their CPF to earn tax relief. For me, topping up my CPF will not reduce my tax in any way. So for me, I'm not going to top up this year. 

And the reason for that is simply because of this statement from IRAS:

A personal income tax relief cap of $80000 applies to the total amount of all tax reliefs claimed for each year of assessment.

So for individuals, note that your maximum amount of tax relief is capped at $80,000. Once you reach that sum, topping up your CPF will not help reduce your tax. 

I get a substantial tax relief from the working mom tax relief. The following is the tax relief for working moms:

• 15% of earned income for 1st child
• 20% of earned income for 2nd child
• 25% of earned income for 3rd child and beyond

As these relief are cumulative (meaning if you have 2 children, your tax relief is 15% + 20% = 35%), they become quite significant. With 3 kids, I qualify for 60% of tax relief of my earned income. This forms the bulk of my tax relief.

Another bulk of relief will be from my compulsory CPF contribution. Without us doing anything, a portion of our salary goes to CPF. This contribution is known as the compulsory employee CPF contribution, and they are included as part of my tax relief. 

After adding in my CPF and working mother tax relief, I've exceeded the personal income tax relief of $80,000. I like that IRAS highlight this (I copied this from IRAS' website):

Please note that a personal income tax relief cap of $80,000 applies to the total amount of all tax reliefs claimed (including relief on compulsory/ voluntary CPF contributions) for each Year of Assessment.

There will be no refund for accepted voluntary CPF contributions. Please evaluate whether you would benefit from tax relief on your voluntary CPF contributions and make an informed decision.

Well, part of my CPF contribution are taxed now OR you can look at it as I don't get the full 60%  working mom tax relief. Any way you look at it, topping up CPF in anyway will not reduce my tax. On a side note, this means based on current situation, I won't benefit from the additional tax relief for working mom if I have another kid. But honestly, whether I want more kids or not has nothing to do with tax, anyway.

Today's Christmas Eve! Have a Merry Christmas and a Happy New Year!

Life as a Consultant

I've been working as a consultant for the past 8 years. There are many consultants in the world, and they do a wide variety of different roles. But my job as an engineering consultant is to advise clients on how to improve their processes, engineering design, and so on.

Pros of Being A Traveling Consultant

In terms of work, I am most blessed to visit so many companies, and people generously share information with me, broadening my horizon. The generous sharing was of course so that I can help them as much as possible. But, when can you go to people's control room as an external person, and get to look at all their standard operating procedures (SOP), their control panels? Few will get that opportunity. Because my consulting company has a wide variety of clients, I've visited so many different factories (producing the weirdest thing to the typical things) in so many countries. Many don't get so much exposure as me. 

Office politics is minimal. For our clients, I'm seen as an outsider, and well, there's no need for politics with me. In my company, I 'm rarely even in the office. There's little politics, apart from nasty emails from people I hardly know. I have little feeling towards nasty emails since I don't see the person writing it. I just interpret it as poor writing on their part. 

As a consultant, pre- COVID, it was a jet- setting life. While many financial bloggers are talking about credit card hacks to gain as many points to take business class (ok, not for first class though. I've never taken first class), I've taken my fair share of business class flights (Emirates, Asiana and SQ only actually) for flights more than 8 hours. Also, from the incredible amount of travel I have done (during peak period, I'm on the plane every alternate week), I have so many Krisflyer miles for upgrades to business class or simply free flights. No need any hack. But, I  started being sick of traveling in recent years. I haven't traveled for holidays for years. I had been clearing leave by staying home. I used krisflyer miles to exchange for ipads (and other stuff from Krisshop) - I know, people say it's get the least value per mile, but it suits me best.

From the many hotel stays that I had, I am able to exchange for free nights staying in suites for free. I've stayed in Le Meridien in Sentosa (good bye), and also W Sentosa's suite (go check out how much it cost) for free. I'm a lifetime silver member of Marriot Bonvoy and am midway to life- time gold. #notproudatall

Meals abroad are paid for. We don't get allowances for travel, just reimbursement for food, transport, hotel, airfares and other travel expenses. So, I have eaten loads of different great food. Hai Di Lao, Ding Tai Feng and so on? I've eaten them, overseas. Hairy crab? I get to eat how much I like, and it's not expensive in China (my clients will direct me to the right place). 

When I'm visiting clients based in Singapore, I take a cab to their factories. Grab points, comfort- delgro points? I have loads of them to exchange for my own free rides (e.g. when I need to go office, or simpy going out).

Of course, all this travel was pre- COVID. Now you must be thinking this is an excellent job, and you want to take it.  I've many friends who envy my job. But, I envy theirs.

Cons of Being A Traveling Consultant

I didn't mention the pros to brag. Instead, I want to show that for all the perks you get, there's a sacrifice to be made. It's just whether you mind the sacrifice. 

Firstly, health. When you are on the plane, do you know that you are subjected to high amounts of UV rays? In fact, while you are indoor, you need more sunblock on the plane (think- you are even nearer to the sun now!). When you are eating out so often, there is less control over the quality (and how healthy the food is). 

If you are not traveling, you get to celebrate birthdays, respond to emergencies, and so on. When you are overseas, it's hard. Even if you only have 8 hours working, the rest of the time you have, you can't go home. Yes, you can go round and see the sights of the country. I have been to Taiwan for business more than 20 times. Taiwan is great, many places to visit, but as a not very adventurous person, it's not so appealing anymore. 

Next, when you have kids, the time away from home is bad. To make up for the time I'm absent (and not able to teach them), I spent a lot of money on enrichment (which I could have taught). To manage the kids while I'm away, my partner give in to TV and screen time. 

So now, with COVID, there's little travel for consultants like me. Travel has been replaced with conference calls. For local clients, I still visit them. It seems I should like my job even more. You would say I should love my job now. 

But something in me wanted a change. Firstly, my company does not pay well. It justifies it with great benefits. But I prefer money.  My boss hasn't promoted me (ever since he had been my boss), and he'll tell me if I do A- Z, maybe the company will consider, but no guarantee. Then, they are thinking of sending us overseas, go for quarantine, then visit our clients. What are your thoughts on these? While it's not confirmed yet, to me, it's simply a matter of when. 

And I have my plans too

When COVID is finally under control worldwide, travel will resume. And I'm sure my company will make me travel every week to make up for the lost time. 

And for now, while the managers think of long trips with quarantine overseas, I want no part in it. Rather than stressing over what happens then, I bit the bullet.

Sometimes, we hang on to a job too tightly when it's no longer aligned with our values, thinking that we can't live without that job. But there's abundance in the world. There are many opportunities out there. It's just takes time and effort to uncover them. You just got  have patience and believe in yourself.

We have to let go of some things, so that we can let other things come. 

Cheers!

How much I spend on 3 Kids a month.

Many people say that kids are one of the largest expenses you can have. I have 3 kids, and this is how much I spend on them per month.

1. Childcare

I am not ready to engage any domestic helper. Hence, while I am at work, the childcare centre will help me engage my kids. There are many reasons why I didn't opt for a domestic helper, but perhaps that will be in another post. My youngest is in infant care, and my two others are in childcare. After government subsidy, this come to a whooping $1,800 ($800 for infant care, and $500 each for childcare).

There are occasional outings at the childcare centre. I only let my eldest go, as I feel kids before the age of 3 are unable to appreciate or remember where they have been to. These excursions average $20 per month (so are more expensive like watching a play, while some like going to the library are just a few dollars).

Total per month for childcare: $1820

2. Enrichment

Following the same concept as excursion, only my eldest goes for enrichment. For just 2 enrichment per month, I spend $300.

Total per month for enrichment: $300

3. Milk

I have three kids. All of them are on different milk

The infant is drinking breast milk, so I do not buy milk powder for my baby. I pump most of the milk with a modestly priced breast pump, Spectra 9 which cost about S$100. I have used this for years, and it's still working. And I also have a spare. I have used this for all my 3 kids, and this is an excellent pump, worth its price.

If you want to store a lot per bag, consider this. I store about 300ml ++ per bag inside (I know it is above the capacity), and I use about 120 pieces per month. 

If you are going for a lesser quantity per pack, this is cheaper:

I also bought a freezer. It's a one time fee, so it's not included in my monthly calculation.

My 2- year old is on full cream milk powder (not formula milk). It costs about $60 per month.

My 4- year old is on UHT milk, and it costs about $20 per month.

Total amount spend per month on milk: $100

4. Insurance

I bought medishield plus rider for all of them. This cost about $162 per month for all three of them.

5. Diapers and Wet Wipes

My eldest is fully toilet trained, so no more diapers. But my two others are still on diapers which I buy here when it's on discount. They cost me about $70 per month in total for both of them. For wet wipes, I buy from value shop ($1 per pack), and this is at most $10 per month.

Total for diapers and wet wipes: $80

6. Food

I usually grit my teeth when I eat out with my kids, so I have been cooking for the most of the time. This actually cut down a lot of my food cost too. On average, I spend $100 per week on groceries. I can't differentiate theirs from mine, so I shan't. Though I guess most of the grocery cost is for me than them. They just eat one small bowl each per meal? Anyway, I just take the total cost of $400 per month.

Total for food: $400

7. Medical

This is for injections, doctor visits and so on. Most vaccines are government-subsidized, but we took those recommended as well. Together with other doctor visits, this is about $100 for all three of them per month. One tip, go to a polyclinic for doctor visits, you'll save a lot. One of my children had dry skin, and got a moisturizer. The cost of it is less than $2. Nice!

8. Activities at home

Kids need to be entertained continuously. I used to buy toys, but stopped as I feel that they do not need so many toys, and also because my home is going to become a junkyard for toys. Nonetheless, they still need many things to keep them occupied. These include stickers, color pencils, origami paper, books, and so on. I buy them from Value Shop. For about $1, you can get a 12- colored color pencil set. 

On average, I spend $10 per month in this category. 

9. Excursions

I bring my kids out. This range from free activities such as to the playground, park, library and so on, to paid ones such as the swimming pool, Uncle Ringo, Zoo, and so on.

I'll include items I buy for the trip to free places (e.g. kids scooter and tricycles, etc.).

On average, I spend $100 per month.

10. Clothes/ Shoes

I buy them only when needed. I don't see any value in having too many clothes or shoes since they outgrow them quickly. My younger and youngest wear those that my eldest can't wear, so I just spend on one person. This is about $20 per month. Buy online. $20 can last much longer.

Total Amount spent per month on three kids is about $3092

The One Thing You can Control at Work

This article was sparked from dropping my eldest at the enrichment centre. Before I left her for class, I told her to "Enjoy Youself!". Then I stayed for a short moment while she walked in, and overhead many parents telling their kids like "Pay attention.", "Speak loudly today." "Get more stars (the teacher will give a number of stars according to their performance)", and so on. None asked their kids to enjoy. Seems like the focus is performance.

Well, let me set it right. I expect my child to pay attention in class, and speak up when she knows the answer or have some stuff to say. My intention of enjoyment is definitely NOT just playing other things while the teacher teaches. However, what I hope is through the class, she finds things that she enjoys. It's a Chinese enrichment class. So it could be finding enjoyment in reading, listening, or interacting with others in Chinese. Whatever it is, as long as she enjoys something from the lesson. Whether she shows that she is the best or read the loudest in the class is not essential, unless that's something she enjoys.

This makes me wonder, instead of hoping for a smooth day at work, or a fruitful day and so on, why don't we enjoy a day at work? Instead of focusing on the things that we do not enjoy at work, why not complete all the tasks and at the same time, be mindful of the things that we enjoy and really savour it. Make that the highlight of the day. After all, we could be spending more time at work than anything else. This enjoyment could be doing an analysis that you are passionate about, reading up on a work related topic that interests you, talking to a colleague to understand more about what they do, negotiating with your favorite client, savoring the delicious coffee in pantry, working with a software that is only available in your company's computer, and so on.

For most of us, we can't fully control who our boss is, what we need to do, how our clients react, and so on.  These are external factors that have too many dependent variables. However, we definitely can control our mindset, and this in turn controls how we behave or react to things.

You have chosen to work today, so enjoy your day at work!