Kuala Lumpur, Oct 26: The 2023 RinggitPlus Malaysian Financial Literacy Survey (RMFLS) has disclosed remarkable insights into the financial resilience of Malaysians.
Despite facing persistent global economic challenges and mounting inflation, a surprising 94 percent of survey participants have taken proactive measures to enhance their financial well-being this year.
This year’s survey, conducted by RinggitPlus, delved into various aspects of financial behavior, shedding light on unique challenges encountered by Malaysians.
The findings also highlighted digital financial literacy, scam prevalence, gender disparities, and the financial outlook of Gen-Z.
Resilience in Challenging Times
In a world plagued by ongoing financial hardships and economic uncertainties, 32 percent of respondents reported that their financial situation had worsened compared to the previous year.
A staggering 55 percent expressed feelings of anxiety, frustration, or embarrassment regarding their current financial status.
The statistics reveal the financial strain faced by many.
For instance, 71 percent of respondents could save only less than RM500 each month, and 67 percent indicated that their emergency savings could cover them for three months or less.
Meanwhile, 55 percent confessed to spending as much as or more than they earned every month, essentially living paycheck to paycheck.
Despite these seemingly disheartening figures, this year’s survey unveiled an unexpected resilience.
An impressive 94 percent of respondents took proactive measures to improve their financial situations. The top three actions taken included cutting back on leisure activities, dining out less frequently, and diligently tracking expenses.
Prevalence of Scams Prompts Digital Financial Literacy Awareness
One of the survey’s key findings was the astounding fact that 94 percent of respondents reported encounters with potential scams or fraud attempts in the past year.
This highlights the urgent need for enhanced digital financial literacy in Malaysia.
In response to the seriousness of the matter, the banking industry has launched an aggressive anti-scam awareness campaign, and the government has increased funding for the National Scam Response Centre (NSRC) for the upcoming year.
Notably, the RMFLS survey also revealed a shift in trust regarding financial matters, with 68 percent of Malaysians turning to social media for financial insights over traditional sources like friends and family. This shift raises concerns in an era marked by misinformation and the emergence of unaccredited “financial gurus” online.
These findings underscore the expanding definition of financial literacy. In addition to traditional financial concepts, digital financial literacy now encompasses measures to safeguard personal and financial information online and identify reliable sources of information. Strengthening digital financial literacy is pivotal in empowering Malaysians to make informed financial decisions.
Disparities in Financial Security
The survey further highlights the financial vulnerabilities faced by Malaysian women. Due to a combination of lower workforce participation and growing wage disparities, Malaysian women are more exposed to financial shocks.
For instance, 75 percent of female respondents save less than RM500 per month, compared to 66 percent of men. Additionally, 69 percent of female respondents can survive for less than three months on their savings alone, compared to 64 percent of men. These disparities leave women more vulnerable to financial emergencies such as job loss or unexpected expenses.
These challenges in saving also impact the ability of Malaysian women to grow their wealth and plan for retirement. Only 44 percent of female respondents have started investing, compared to 56 percent of male respondents. Similarly, 51 percent of female respondents have financially started planning for their retirement, which is 10 percent fewer than their male counterparts.
To address this concerning trend, government initiatives such as those in the Madani Economy Framework and Budget 2024 play a vital role.
For example, Budget 2024 includes financing support specifically for female entrepreneurs, along with tax incentives to encourage women to re-enter the workforce. These initiatives aim to increase female participation in the labor force.
A Promising Path to Financial Independence for Gen-Z
The survey challenges the prevailing notion that Gen-Z prioritizes instant gratification and lives for the moment. The findings suggest that Gen-Z may be more financially responsible than commonly believed.
In fact, there are no statistically significant differences indicating a lack of financial responsibility and literacy among Gen-Z respondents compared to other generations. For instance, 68 percent of Gen-Zs save less than RM500 a month, a figure closely aligned with the 71 percent national average or 70 percent of Millennials.
Moreover, the survey reveals that 48 percent of Gen-Z respondents have already started investing, indicating a promising sign for building wealth over the long term, given their young age.
Despite the challenges posed by entering the workforce during a pandemic and dealing with a high cost of living, Gen-Zs appear to be just as resilient as their fellow Malaysians. These circumstances may have encouraged them to actively pursue financial independence at an earlier stage in their lives.
Yuen Tuck Siew, CEO of RinggitPlus, remarked, “The RMFLS findings this year highlight the new challenges that Malaysians face and serve as a reminder that they can only be overcome through collaborative efforts from all parties across the government, the financial services industry, and the rakyat. I am inspired by the resilience demonstrated by Malaysians in addressing financial adversities, and we at RinggitPlus will continue to play an active role in improving digital financial literacy in Malaysia. With that in mind, we will be collaborating with RMFLS partners to intensify the creation of financial literacy content, especially on social media. We remain committed in our journey to helping Malaysians, one wallet at a time.”
As part of the RMFLS 2023 initiative, RinggitPlus is partnering with GXBank, CTOS, and Capital Dynamics to produce a series of social-first educational content focused on various pillars of personal finance.
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