How smart are Malaysians when it comes to handling money?
In October 2018, we ran a survey in collaboration with RinggitPlus, Malaysia's leading money comparison website and Ringgit Sense Plus, a personal finance show on TV3. We tested a total of 3,000 Malaysians to find out about their spending habits and how well they managed their finances.
While some of the trends were expected, the overall findings were actually quite worrying. Here are a few things we found:
1. One in three Malaysians admitted to spending equal or more than their monthly salary, essentially living from paycheck to paycheck
It's tough to save any money if most of your paycheck goes towards servicing loans, credit card bills, and paying for a house mortgage or rent. After deducting the money needed for food, transportation, and daily essentials, it's no wonder that many Malaysians are left with nothing to save. And we haven't even talked about emergency funds!
This goes to show that a lot of Malaysians are living beyond their means, which is a worrying trend, especially when you consider this next fact.
2. A majority of Malaysians have not built up the recommended amount of savings in their bank accounts yet
While the rule of thumb is to set aside three to six months worth of expenses as emergency funds, most Malaysians struggle to save that much money. That means if *touchwood* Malaysians were to lose their jobs or face a health emergency, many would find it hard to sustain themselves during that period.
3. Nevertheless, one positive trend we found is that despite struggling with savings, 82% of Malaysians were covered by some sort of insurance
4. A surprising fact is that 42% of Malaysians still don't own a credit card
While companies in Malaysia have been trying to push for the latest fintech solutions like e-wallets and QR-pay, the fact is that four in ten Malaysians don't even have a credit card.
A lot of Malaysians still prefer to use cash, which is not necessarily a bad thing. However, to keep up with the times, Malaysians would need to become more educated about basic financing solutions like credit cards.
5. Finally, one in five Malaysians do not invest money for the future
If you flip that statement, it means that most Malaysians actually do invest for the future. And this doesn't come as a surprise, because most companies in Malaysia offer EPF savings for their employees. However, Malaysians should not only rely on EPF savings alone, but should work their way towards financial freedom with incremental investments throughout their lives.
To take things one step further, we got a few Malaysian kids to hit the streets and test adults on their financial literacy. Watch the full video below to see what happened:
We're guessing you probably didn't know a bunch of terms mentioned in the video too
But not to worry. You can start building your financial vocabulary and become more financially smart thanks to RinggitPlus. As a follow to the survey and on-ground experiment, the team at RinggitPlus has teamed up with popular TV show Ringgit Sense Plus to bring Malaysians practical tips to improve their financial literacy.
Follow Ringgit Sense Plus on Facebook to catch the latest episodes for free.
Ultimately, RinggitPlus wants every Malaysian to be equipped with the knowledge to make educated choices when it comes to money matters