You know the advice that says you should save up at least three to six months’ worth of your living expenses just in case you are ever out of a job? Well, it turns out that most Malaysians don’t heed this advice as a vast majority can’t afford to be jobless and with no income.
According to FMT, a Bank Negara Malaysia (BNM) survey entitled BNM’s Capability and Inclusion Survey 2015 revealed that about 68 per cent of Malaysians cannot survive one week without a source of income. That’s not good!
Not only that, it seems that our penchant for instant gratification is very strong and is proving detrimental to our financial health.
“More than 75 per cent of those surveyed said it would be a challenge to even raise RM1,000 of immediate cash for emergencies. Additionally, the survey revealed that a significant number of Malaysians live for the moment and display short-sighted tendencies, focusing on instant gratification,” BNM deputy governor Shaik Abdul Rasheed Abdul Ghaffour said.
He added that millennials did not have long-term financial planning and explained, “This is because they are mainly more passionate in keeping pace with the latest digital lifestyle. In a study by the Asian Institute of Finance in 2015, it found 38 per cent of youth rely on personal loans and 47 per cent engage in expensive credit card borrowings.”
The Malaysian Reserve reported that only 40 per cent of Malaysians felt prepared for retirement, which is bad because Rasheed said, “The lack of awareness on financial literacy regarding sufficient savings for retirement will eventually become a struggle to meet the post-retirement standard of living.”
He attributes all of these to poor financial literacy as Malaysians do not have enough knowledge to make rational decisions. However, BNM says that they already have a five-year national strategy to teach us how to handle our finances. Are they gonna teach us how to be a millionaire?
Although they did not elaborate on the details of the strategy, it is supposed to educate Malaysians from all stages of life to make sound financial decisions such as “nurturing values among young children, to inculcating positive behaviour for adults and preparing Malaysians to retire comfortably”.
That’s bad, guys. Perhaps it’s time for us to reaaally take a step back and evaluate our financial status!
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