Kuala Lumpur, Oct 18: Are Malaysians on the road to financial recovery yet?
The short answer is no, unfortunately.
After almost two gruelling years of dealing with the COVID-19 pandemic, have Malaysians changed the ways they manage their money?
More importantly, are we on the road to financial recovery as the economy gradually reopens?
Well, the RinggitPlus Malaysian Financial Literacy Survey (RMFLS) dug deep and found that Malaysians are actually finding it harder to save money each month.
Fifty two per cent of respondents save less than RM500 monthly or do not manage to save at all, an increase from last year’s 49 per cent.
Meanwhile, 21 percent live paycheck to paycheck as they do not save any money each month (a slight increase from 19 per cent).
Even so, 76 per cent of respondents believe that they are in control of their money – of which, 33 per cent still spend exactly or more of what they earn.
Having said that, Malaysians have been taking emergency funds more seriously since the pandemic.
In fact, 63 per cent of respondents picked “emergency fund” as their top reason for saving money, followed by retirement (49 per cent), travel (40 per cent), and new property (38 per cent).
They are also more aware that EPF savings will not suffice for retirement (15 percent, as opposed to 30 per cent who believe their savings are sufficient for retirement in 2020), but about half of this group (45 per cent) admitted that they have not started planning for their retirement.
“In last year’s RMFLS, we saw that a large majority of Malaysians finally realised the true value of an emergency fund,” Co-founder and Director of RinggitPlus Hann Liew (pictured above) said.
“But the prolonged pandemic continues to take a huge toll on the economy and finances for everyday Malaysians.
“It’s disheartening to see this play out in the way Malaysians are less able to save, but fortunately, savings isn’t the only avenue for money management.
“We at RinggitPlus will continue doing our part in educating and empowering Malaysians to make better financial decisions through a holistic approach, which also includes better debt management and other ways to grow their money,”
Savings aside, Malaysians are also open to growing their money through automated investments such as cryptocurrencies and robo-advisors.
Almost half (49 per cent) of Malaysians said that they are willing or open to investing in cryptocurrencies.
The survey received 3,033 responses nationwide, from which stratified sampling of 1,518 was conducted to achieve a more representative sample of the Malaysian population.
RMFLS 2021: Key Findings
- The general pattern of personal finance habits have not changed significantly. If anything, the rate that Malaysians are saving has even dropped – possibly due to the economic effects of the COVID-19 pandemic.
- Only 15 per cent of respondents are able to save RM1,500 or more each month, a reduction from 20 per cent in 2020.
- Half (50 per cent) of the respondents revealed that they would not survive more than 3 months if they lose their job.
- 44 per cent spend exactly or more than what they earn, similar to 43 per cent in 2020.
- 21 per cent have either taken or are planning to take a loan moratorium, which is two times more than the industry estimates.
- Credit card ownership dropped this year: 45 per cent do not own any (35 per cent in 2020), 45 per cent carry 1-3 cards (from 51 per cent), while only 10 per cent own more than four cards (previously 14 per cent).
- E-wallet adoption remains relatively healthy in Malaysia at a rate of 89 per cent. Thirty six per cent even use three or more different e-wallets for their payments.
- Despite efforts to encourage users to purchase insurance online, the majority of Malaysians 65 per cent still prefer buying via an agent.
- Youths and millennials (18-35 years) still have a long way to go.
- 24 per cent do not have enough to survive beyond one month.
- 57 per cent cannot survive more than three months.
- 45 per cent spend exactly or more than what they earn.
- Being more digital savvy, more than half (63 per cent) of youths are willing or open to investing in cryptocurrencies.
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