Malaysians Below 30 Are Bankrupt Simply Because They Want To "Start Their Own Lives"
Six out of 10 bankrupt cases in Malaysia involve people aged between 25 and 44.
Could this be due to high cost of living... or simply poor financial planning? The Insolvency Department of Malaysia recently revealed that six out of 10 bankrupt cases in Malaysia involve those aged between 25 to 44.
According to a report by The Star, Malaysians in that age group are the biggest group classified as bankrupt, making up almost 60% of the 94,408 cases reported from 2013 to August 2017.
In fact, some youths are already bankrupt before they even turn 30 due to excessive spending, with some even going as far as to take out personal loans to pay for overseas trips, new electronic gadgets, and lavish weddings.
Though director-general Datuk Abdul Rahman Putra Taha said multiple factors may have contributed to youths' financial failings, he pointed out that many of them just wanted to "start their own lives", such as getting married
"When they start their own lives, they are not financially stable. Some want to get married, but if the in-laws ask for hantaran gifts such as cars or a house, they need the money.
Their pay can be considered low but they need expensive gifts. Where else can they go other than applying for personal loans,” he was quoted as saying by The Star.
According to Malay Mail Online, an average wedding in 2013 could cost over RM50,000, leading to couples taking out personal loans to fund their nuptials if they are short on financial support from their parents. Imagine how much a wedding would cost now as we're entering 2018.
In addition, Abdul Rahman listed out the top four reasons for bankruptcy among Malaysians:
1. Car loans (26.63%)
2. Personal loans (25.48%)
3. Housing loans (16.87%)
4. Business loans (10.24%)
He also revealed that the total number of Malaysians who have been declared bankrupt from 2013 onwards is a whopping 296,712 as of August 2017
Selangor had the most cases at 72,114 people, followed by the Federal Territories (46,377), Johor Bahru (41,179), and Penang (22,136).
Abdul Rahman urged the public to manage their finances wisely to ensure that they are not burdened by debt, adding that Bank Negara is working towards making credit cards less attainable for the younger folks.