When 47% have less money in emergency savings than credit card debt
I could not find the stats for Malaysia in terms of money in emergency savings versus credit card debts but I do think that with online shopping being the rage these days, it will get harder to save more versus spending more. There’s also the Buy Now Pay Later (BNPL) which is becoming ever so popular with so many different options.
Of course, for the past 2 years, one significant event which has affected many people negatively is the Covid-19 pandemic. Many lost their job. Some may be struggling to find a new job paying them similar salary as their last job. Some may have even defaulted on some of their loans too.
Hopefully, the recovery will be stronger soon for the sake of many Malaysian businesses with the reopening of the international borders on 1st April 2022. (Nope, it’s not an April Fool because this is a government announcement.) Here’s the news earlier. Malaysia fully reopens international borders from 1st April 2022. What are the implications?
Article in cnbc.com Due to the unfortunate side-effect of the pandemic, only 53% of Americans say they now have more money in their emergency savings than what they owe in credit card debt.
During the pandemic, millennials, who range in age from 26 to 41, and members of Gen Z, who are between the ages of 18 and 25, were among those whose savings took the biggest hit, according to a new Bankrate survey
Millennials were also more likely than other age groups to owe more in credit card debt than what’s in their savings.
According to Bankrate, 32% of millennials say what they now have in savings is less than what they owe in credit card debt. However, Gen Z and Gen X tend to be doing better than millennials in that regard, the Bankrate survey finds, with only 23% of Gen Zers and 24% of Gen X reporting their debt exceeds savings.
Please refer to the full article with a lot more details here: Article in cnbc.com
It’s not just the Covid-19 which is worrying
A few years ago, my good friend who’s a marketing manager for an European car brand told me that many buyers who came to the sales gallery actually could not afford the car. Many failed during their loan applications. Somehow, they just want to try their luck. Actually, if they were successful in their car loan application, they would soon fail in their monthly repayment for that car they could not afford.
Some may even be trying to show their “status” to all their peers and thus may be taking up debts to buy things they do not need to make people they do not like be jealous of them. Hopefully they understand that their friends would not mind the car they drive. Stay focused.
Buy within affordability so that one is able to continue buying many more things versus just buying one car and suddenly nothing else because the salary was just not enough. Keep saving and make sure emergency savings is always ready yeah. There’s also nothing wrong to live a middle class life versus a life where the total debts are more than the emergency savings.
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