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Malaysians in debt. Red alert. Serious action please.

Malaysians in debt is an issue which is becoming very serious. A long time ago, bankruptcy cases used to be about businesses ventures which failed.

These days, majority of everyone who’s working and could qualify for a credit card would have a credit card. A credit card could be a status symbol (e.g, classic, gold, platinum, visa infinite etc) and it could be a convenience (even if this is eroded by the many e-wallet we have these days) but a credit card may also be that door into a never-ending spiral of unpaid debts months after months until in the end, we may just become a bankrupt.

How serious is this Malaysians in debt issue in numbers? Let’s look at some numbers.

Article in 84,805 Malaysians declared bankrupt between 2015 – 2019. (That’s close to 17,000 per year or 46 persons per day) 26 percent of all these cases were from people age of 34 and below. In 2018, it was revealed by Bank Negara Malaysia (BNM) that 47 per cent of Malaysian youth have high credit card debt. The reasons for bankruptcy include inability to sustain debt made of instalment purchases, personal loans, and credit card debt.

Financial literacy is super important so that one could manage their financial resources especially the youth. Two things come to mine and they are budgeting and balancing. Budgeting is basically identifying how much money is coming in every month (income) and how much is going out every month (expenses). Balancing is making sure total expenses shall not exceed the amount of income every month. Feel free to read the long and comprehensive article here: Article in

malaysians in debt
Photo by Kristina Paukshtite on

Earning more does not help if we spend even more

There has been many arguments that one major reason Malaysians are financially in trouble is because we earn too little. Actually, that’s only half true because when we earn more, we may think we deserve to spend more and when we spend more, we actually spend way more than what we actually earn. When this increases and accumulates for many months, the salary we earn will not be enough to even cover the interest payments. That is when we become part of the statistics in an article like this one.

Budgeting is all about spending within our means

There are running shoes which could cost us RM400 and there are those which we could buy for RM49.90 (Go take a look at Decathlon for example). Truth is, unless we are really competing in some marathons, there is no big difference in speed. Maybe less comfortable, maybe heavier by 50gm but generally acceptable. Assuming the RM49.90 shoe could last us just 2 years and the RM400 could last us 5 years (RM80 per year), it is still way better to get the RM49.90 shoes yeah. This is what we call budgeting… and in Malaysia we are fortunate because we have choices.

It starts with budgeting and balancing but…

Once we could budget and we could balance, we would need to start learning about investments. Long time ago, Fixed Deposit is considered a form of investment. Those were the time when the FD rates could be as high as 5% or higher. Remember? Today, Fixed Deposit rates will start to provide negative returns when we take into account the potential inflation. Thus, we need to make our money work harder and just saving alone does not cut it anymore. Just remember that investing is long term and not some kind of get-rich-quick scheme.


We need to get our acts together because the future is a long one. We live longer, thus will need money to last way longer than yesterday. What we do today affects our tomorrow and while we may not feel it immediately, very soon it will come back to haunt us. Climbing out of a debt hole will be a tough journey. Malaysians in debt is not an easy time. Let’s focus on building a mountain of wealth instead yeah. Happy understanding.

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Next suggested article:  It is these stages: Salary – Savings – Invest. Which stage are we in today?

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.


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