PETALING JAYA: Malaysian youths are in a bind over the rising cost of living and a lack of financial literacy, said financial experts.
Licensed financial planner Marshall Wong said young adults should consider employing proper financial management advisors to help them to be more prudent and track their expenditure, instead of spending blindly.
He said while youths understand the value of saving money, their desire to live a luxurious lifestyle overrides it.
“Knowing how your money is spent is an important step. In this case, an expense tracker would be their best friend, but most young adults do not have the habit of tracking their expenses.
“Firstly, they need to sort their expenses from the largest to the smallest and go through it line-by-line. Then, ask themselves if there is something that can be reduced or removed entirely,” he added.
“They know the importance of savings, but they usually save for vacations, marriage or the purchase of big-ticket items such as a down payment for a vehicle or property.”
Another financial expert, Felix Neoh, said working adults should look for ways to cut expenses rather than blame the country’s economic situation, since the government is doing its best to help the people.
He urged those who were in debt to prioritise their needs and repay their installments as soon as possible rather than increase their debt exposure.
On household debts, he said the easy access to credit, such as personal loans and installment plans, was the primary reason most families fall into debt.
“We have youngsters at both ends of the spectrum, known as savers and spenders, and those in between. But some have higher incomes and lower borrowings (loans) while the rest suffer with insufficient salaries and higher commitments.
“So, we can’t brand anyone as a saver or spender, but we need to encourage everyone to save based on what they can afford now, and slowly increase it as their salaries grow,” he said.
“People should consider cooking at home instead of eating outside. I advise them to buy second-hand products that will be cheaper compared with new items.
“To prevent household debt, people need to know their financial position and recognise if they have a positive or negative cash flow on a monthly or annual basis, and then look for ways to improve it.”
Customer service executive Angela George Varughese, 25, said her monthly expenses exceeds what she earns, especially after the prices of essential goods and other household items rose.
She said it was difficult to save money unless the government addresses the issue of price increases so that people can afford to buy more things and eventually save some money.
“It’s not only difficult to save but it’s almost impossible to survive under the current economic conditions where the prices of goods have increased. We understand that the Russia-Ukraine war has caused a rise in prices of chicken, but we are still puzzled why other items have gone up too. Even car wash operators have increased their prices. The government has to control this,” she added.
“Youths are forced to take loans just to survive with a basic lifestyle. How is their savings going to help when salaries are too low? Almost everyone is finding it difficult to live in Malaysia.”
Senior executive Nabilah Saidatul Mohd Sahizan, 29, said salary increments will definitely ease the burden of many workers.
“Income is not growing in tandem with the cost of living. For example, cooking oil prices have increased by 40% while annual salary increment is approximately 5%. This makes it near impossible for anyone to save,” she said.