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KUALA LUMPUR: Nearly half of millennials are spending beyond their means, says Finance Minister Tengku Zafrul Aziz.
He said that according to Bank Negara Malaysia, 47% of young Malaysians have high credit card debt.
“So think carefully about what is necessary and prioritize your purchases, be it a new outfit or a new phone, or, like what one of my nephews wants, a PS5, and you will find that each ringgit will be of great help.
“Warren Buffett said, ‘Don’t keep what’s left after spending, but spend what’s left after saving.’ In other words, pay yourself first and use the power of compounding to your advantage, ”he said today at the Kembara Bijak Wang 2020 awards ceremony (KBW 2020).
Zafrul said, for example, that if a 20-year-old wanted to save RM1 million by the time he turned 60, assuming a 6% annual return, he would need to save around RM500 per month.
He said that according to the Employee Provident Fund (EPF), 50% of EPF members have less than RM200,000 in their accounts, less than the average RM240,000 that members should have in basic savings when they turn 55. years. .
Zafrul also noted that 50% of taxpayers would deplete their savings within five years of retirement.
“However, with the emergence of the gig economy like Grab, Foodpanda and Shopee, we have many opportunities and options to find alternative sources of income to improve our savings.
“In that sense, I am very pleased to see many Malaysians take up the challenge of starting their own businesses,” he added.
He also advised Malaysia to strengthen its financial literacy skills, either by increasing its wealth through investments or by protecting its wealth through insurance or takaful.
“Through events such as KBW 2020, the goal of improving the financial well-being of Malaysians will become a reality in line with Malaysia’s national strategy for financial education,” Zafrul said.
He said that raising the level of financial literacy was a long-term commitment that required sustained efforts and support from many parties.
KBW 2020 is a program involving 5,600 students from more than 20 higher education institutions and 22 UiTM campuses across the country, co-organized by the Credit Counseling and Debt Management Agency, HSBC Malaysia and Universiti Sains Malaysia.
The program, which began in November last year, aims to boost participants’ financial awareness, encourage healthy financial habits, and ensure they are more resilient, adaptable, and financially prepared to face life’s challenges, among others.
