First question. I think everyone knows that Malaysians are saving less today, right? We are, by and large. I know, second question of the reason why people are not saving will be answered with this, ‘cost of living is increasing, how to save?’ Some will say inflation but it amounts to the same issue.
Well, perhaps in future, all these surveys about savings should be conducted in cafes and the few BRANDED smartphone retailers. As soon as a customer comes into a cafe or intends to buy a smartphone, do a survey about saving money with them. If their answer is that they do not save and did not save, ask them WHY were they drinking a RM15 latte or a new smartphone of thousands of ringgit then? And remind them to stop saying high cost of living, please. Okay, now for the actual survey from Ringgitplus Malaysia Financial Literacy Survey 2019.
Article in themalaysianreserve.com Ringgitplus Malaysia Financial Literacy Survey 2019 revealed the following:
21% of Malaysians do NOT save their money
89% believes EPF savings are not enough for retirement
34% says they could not save because they has to pay debts
For those who did not save, 30% says essential expenses are just too high, 25% says they will save if they have balance at the end of the month.
The number of people who do not save are further segmented into three; second highest being 29.2% who believe that essential expenses are too high, leaving with too little amount to save; followed by 25.2% of respondents stating that they only save when there is enough balance at the end of the month. 12% meanwhile said it’s due to their lifestyle including shopping and entertainment.
For those who save, 35% saves less than RM500 per month, 23% saves between RM501 to RM1,000 and 13% could save between RM1,001 and RM2,000. 9% could save more than RM2,000 per month.
‘RinggitPlus’ CEO Liew Ooi Hann said, “The lack of awareness on personal finance is an ongoing challenge for us all. What’s more alarming is that people are in denial of their financial reality.” He added, “For example, we found that 54.6% of respondents aged 20 to 29 do not have a retirement plan.”
Where food spending is concerned, 54% of Malaysians spend RM20 or less per day, followed by RM20 – RM30 and 13% have no budgets for their meals. 3% spends RM30 – RM50.
For smartphone purchases, 52.7% of Malaysians would be willing to spend for a new phone with their credit card due to features like Easy Payment Plan and cashbacks, followed by 40.5% that would use cash instead. There are a lot more findings. Do read it here: Article in themalaysianreserve.com
Earlier article here on financial literacy. Saving is no longer enough. We need to save in order to invest wisely. Are we saving, earning, investing and preserving? We need to help more Malaysians understand that without financial planning, they are planning for financial ruin. Else, everyone continue to think of all the short cut ways; personal loans, more credit cards, renting better than buying and many more misconceptions.
In fact, if we look at it from a life expectancy and retirement basis, we will know why savings alone will not be enough. Retirement was 55 years old since long time ago. Life expectancy in 1960 was 60. It meant savings needed to be enough for just 5 years, generally. Today, we retire at 60 but are expected to live till 75 or older. Savings now needed to be enough for 15 years … happy understanding and please start saving.
<Featured Image is courtesy of Stock Photos from Joyseulay>
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