Do you worry about money stuffs? I do. I think most of us should be.

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Everyone says that medical costs will keep going up. I think it will definitely be going up if we look at the many advanced nations in the world today, it is extremely true. Here’s one very good overview article on healthcare around the world, mostly are among those few advanced and developed nations. Some say they worry about education costs which are becoming higher than ever. True also lah. Salaries of lecturers need to be adjusted higher on a yearly basis too, so of course students need to pay ever more.

Last but not least would be elderly care. Imagine retiring and starting to use up our savings. Nothing goes into the account and every time we withdraw money, we can see the amount getting smaller. Worrying yeah. We may not want to trouble our children but even if we did, they will face a lot of pressure to try and help us too. There’s no need to look too far. There are many seniors who are over 60 years old and they are still working in many of these advanced nations. We are not a special nation, sooner or later, the seniors would also have to continue working. This is when the topic of ‘retirement age extension’ becomes a popular one.

Article in nst.com.my Institute for Democracy and Economic Affairs (IDEAS) senior fellow Dr Carmelo Ferlito said that the urban poor, B40 households worry about housing, education and elderly care costs in their expenses. He said, “I would extend the concept by saying the urban life entails a higher cost of living, not only in terms of prices of products, but also in the sense that, moving away from kampung, people have less access to a “natural” social support system — the community — which helps cope with the lack of services.”

He also said that lifestyle and trends-related habits will affect budgets for the younger generation more. He said, “Think about spending RM10 for a cup of coffee in Starbucks, or the new fashion of bubble tea. In technical term, we economists would say that the younger generations in Malaysia have a higher temporal preference, which means they are more present-oriented, when compared to the older generations, and therefore they spend accordingly.”

Latest numbers in 2016, the B40 group has a median income of RM3,000, M40 (middle 40%) at RM6,275 and T20 (top 20%) at RM13,148. There are a lot more references in the article. Please read it here: Article in nst.com.my

Before we conclude that the B40 households are the only one needing help (click to read more) , lets look at the M40 households. Assuming they really do earn RM6,275 per month. They drive just a RM80,000 car which they deem necessary. That’s already RM1,000 deducted from RM5,275. Another RM1,000 goes to fuel, toll and maintenance and they are now left with RM4,275. Assuming they bought a new smartphone (yeah, that RM5,000 one), that’s RM450 instalment per month which meant that they have just RM3,825. Let’s assume they give their parents just RM500 per month. That’s RM3,325 left. Meals of RM40 per day is RM1,200 per month. Now, they have just RM2,125 left. Still a lot, right?

Accommodation wise, they are renting a nice condominium worth RM600,000 and paying RM1,600 versus accepting to buy an apartment of RM350,000 and a mortgage of RM1,600 instead… They think the owner is suffering but truth is, their future is the one which is suffering. Anyway, you get my point. It’s not just about the EARNING part but also on the SPENDING part. For most parts, financial awareness is key. Happy understanding.

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Next suggested article: Lifestyle not about spending more. It’s about what we are comfortable with.

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