Due to growing up in an age where social class is everything, many young adults tend to spend more to appear stylish and up-to-date with the latest trends.
Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz shared that 40% of young Malaysians are spending beyond what they can afford.
Based on reports by BERNAMA, he also said that Bank Negara Malaysia states 47% of millennials are experiencing high credit card debts.
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“So think thoroughly about what is necessary and prioritise your purchases, whether it’s a new outfit or new phone, or, like what one of my nephews wants, a PS5, and you will find that every ringgit will go a long way,” he explained.
“Warren Buffett famously said, ‘do not save what is left after spending, but spend what is left after saving’. In other words, pay yourself first and use the power of compounding to your advantage.”
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Tengku Zafrul also gave Malaysian youngsters an example of what to expect when trying to save money, saying that if a twenty-year-old wishes to have RM1 million in savings by the time he or she turns 60, they’d have to save approximately RM500 a month.
However, he said that according to the Employees Provident Fund (EPF), EPF members have lower than the average of RM240,000 that members should have in their basic savings when they reach the age of 55. In fact, 50% of them have less than RM200,000.
Considering how badly this economy can turn, as seen throughout this pandemic, it’s really about time we save more than we spend.
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