24% of Malaysians state that they’re unable to put away any savings on a monthly basis, according to The Malaysian Reserve. Meanwhile, of the 32% that do put cash aside, it’s less than RM500 per month. As a result, experts state that the nation doesn’t possess the financial literacy skills they require in order to adequately save for the future.
The country’s high cost of living
Malaysia’s high cost of living is one of the main reasons why natives are finding it difficult to put savings aside. 55% of Malaysians say that they want the government to take action and to lower the cost of living. However, steps have been taken and more are planned. Last year, a wage increase of RM50 was introduced. Single Malaysians registered on the BSH database are also set to receive RM100 cash aid by the end of March. And, from April 1, Malaysians will benefit from a 20% discount when traveling via KTM Komuter service. All of these are positive steps from the government, which a financial advisor can help you utilize in order to benefit your finances both now and in the future.
Be smart with debt
47% of Malaysians between the ages of 20 and 30 have credit card debt which is deemed as “high”. Whereas, 38% have a personal loan in their name. While borrowing cash to cover your costs when you don’t have the available funds in your savings account is unavoidable, it’s essential that you’re smart with the debt that you take on. You should always gain financial advice before committing to a loan or credit card to ensure you get the best deal. Your credit score should also be considered in every move you make as this will need to be healthy when applying for a future mortgage or additional funds. So, be sure to stay on top of your repayments and limit the amount of funds you borrow.
Prepare for financial downfall
29% don’t have enough cash set aside to cover their expenses for longer than three months. But, even more worryingly, 30% don’t have the funds to survive for a month. This is concerning as last year’s unemployment rate topped 10.8%, proving that job losses can occur at any time and to anyone. Setting up a standing order so that cash from your current account is automatically transferred into your savings account will ensure you have money to fall back on. Additionally, seeking financial assistance from a professional financial advisor will help you to prepare for such a situation.
Malaysians are finding it tough to save cash on a regular basis due to the rising cost of living. However, with some financial assistance, clever tricks, and preparation, you’ll be better prepared for the future.