In terms of spending amount, the survey also touched monthly insurance premium, meals per day, a night out, wedding costs, holiday trips and smartphone purchase
by NUR HAZIQAH A MALEK/ pic by MUHD AMIN NAHARUL
AROUND 21% of Malaysians do not save their money, while 89.2% believe their Employees’ Provident Fund (EPF) savings are not enough for retirement, the Ringgitplus Malaysia Financial Literacy Survey 2019 revealed.
According to the survey, 33.7% of those who are unable to save cited debt repayments as the reason for their inability to do so.
The number of people who do not save are further segmented into three; second highest being 29.2% who believe that essential expenses are too high, leaving with too little amount to save; followed by 25.2% of respondents stating that they only save when there is enough balance at the end of the month.
The smallest numbers of respondents, at 11.9% do not save or admit they spend a lot on lifestyle including shopping and entertainment.
Against the 21% of those who have no savings, 35% of Malaysians keep less than RM500 per month, while 23% can save between RM501 and RM1,000, followed by 13% who save between RM1,001 and RM2,000.
Only 9% of respondents said they can save more than RM2,000 monthly and only 9% are saving more than RM2,001.
‘RinggitPlus’ CEO Liew Ooi Hann (picture) said the annual study plays a critical role in providing insights to drive the company’s mission to save the country, one wallet at a time.
“With these findings, we are switching gears to place even greater importance on our battle to proliferate the nation’s financial literacy,” he said last week.
He added that the results from this year’s survey will hopefully serve as a wake-up call for Malaysians to take action.
“The lack of awareness on personal finance is an ongoing challenge for us all. What’s more alarming is that people are in denial of their financial reality,” he said.
The claim that supports this statement is the survey’s findings: 69.3% of respondents consider themselves in control of their money, while 53.4% of respondents admit that they will not be able to survive for over three months with their savings.
Hann added that while Malaysians are aware of financial management, they do not take active measures.
“For example, we found that 54.6% of respondents aged 20 to 29 do not have a retirement plan,” he said.
In terms of spending amount, the survey also touched monthly insurance premium, meals per day, a night out, wedding costs, holiday trips and smartphone purchase.
Out of all the respondents, majority at 45.2% spend above RM200 for monthly insurance premium, for both life and medical, followed by 24.1% spending between RM100 and RM200.
About 18.3% do not have insurance while the remaining number of respondents spend below RM100 on insurance premium every month.
For food, the majority of Malaysians at 54% spend from RM20 or less, followed by 31% that spend RM20 to RM30, while 13% do not have a daily budget placed on their meals, and 3% spend between RM30 and RM50.
Arround 46.6% of Malaysians also believe that RM50 should be the maximum budget for a night out with friends, followed by RM100 to RM150 at 44%. The remaining 9.5% spend over RM150 to over RM200.
In terms of financing plans, most Malaysians prefer not to take a personal loan to cover their wedding costs, about 65.3% would rather try cutting their spending or asking their parents, followed by 13.6% who would agree to a personal loan due to its structured repayment scheme.
The remainders are those who would rather use credit card due to lower interest rate at 10.81%, while 10. 3% are those that consider themselves without choice.
For holiday trips, a scenario was provided: given that the trip to Europe would cost approximately RM10,000, while the respondent has no money.
Around 88.7% Malaysians admit they would rather not join the trip, however, 6.7% of them would be glad to use their credit card for various expenditure, while 4.6% would check alternatives such as personal loans and repayment options.
As for smartphone purchases, 52.7% of Malaysians would be willing to spend for a new phone with their credit card due to features like Easy Payment Plan and cashbacks, followed by 40.5% that would use cash instead, while the remaining 6.8% would be okay with using their credit card to repay conveniently.