Unfortunately, a lot of Malaysians got too carried away with their spendings.
A worrying trend
A huge number of youth in Malaysia are mired in debt due to their spending habits, the Ministry of Finance revealed.Finance Minister Tengku Datuk Seri Tengku Zafrul Abdul Aziz told Malay Mail that Bank Negara Malaysia data revealed that 40 per cent of millenials are spending more than they earn.
More worrying, 47 per cent of Malaysian youths reportedly have high credit card debts.
Tengku Zafrul also added that Malaysians are not saving enough for retirement based on the data provided by the Employees Provident Fund (EPF).
50 per cent of EPF members have less than RM200,000 in their accounts, which is lower than the average of RM240,000 they should have in their basic savings by the time they turn 55 years old.
With only that amount to sustain them after retirement, they would exhaust their savings within five years of their retirement, Tengku Zafrul said.
We guess we really have to keep our spending in check, and start saving more. Who knows what the future will bring, kan?
Low financial literacy
For the past several years, data has consistently shown that more and more people are going bankrupt at a young age.Between 2015 and 2019, about 85,000 Malaysians below the age of 25 were declared bankrupt, a Sinar Harian article shows.
According to Hijrah Wealth Management founder and consultant Rohani Mohd Shahir, the main reason for bankruptcy at a young age is the "five-series" loans: personal, education, car, home and credit card.
"All the loans combined can easily bankrupt a young person," she was quoted as saying.
Rohani also said that when she was working in the banks in the 1980s and 1990s, it was very rare to see people below the age of 40 being declared bankrupt, but that has since changed.
"Among the reason for bankruptcy among young people are becoming guarantor for their father's cars and some who go bankrupt because they like to be stylish and own more than one credit card.
"In fact, there was a point where 11 million Malaysians had credit cards and it could be said some young people had up to five credit cards," Rohani reportedly said.