Are Malaysians On The Road To Financial Recovery Yet?

ringgitplus

13th October 2021 - 6 min read

After almost two gruelling years of dealing with the Covid-19 pandemic, have Malaysians changed the ways they manage their money? More importantly, are we on the road to financial recovery as the economy gradually reopens? Well, the RinggitPlus Malaysian Financial Literacy Survey (RMFLS 2021) dug deep and found that Malaysians are actually finding it harder to save money each month.

52% of respondents save less than RM500 monthly or do not manage to save at all, an increase from last year’s 49%. Meanwhile, 21% live paycheck to paycheck as they do not save any money each month (a slight increase from 19%). Even so, 76% of respondents believe that they are in control of their money – of which, 33% still spend exactly or more of what they earn.

Having said that, Malaysians have been taking emergency funds more seriously since the pandemic. In fact, 63% of respondents picked “emergency fund” as their top reason for saving money, followed by retirement (49%), travel (40%), and new property/home (38%). They are also more aware that EPF savings will not suffice for retirement (15%, as opposed to 30% who believe their savings are sufficient for retirement in 2020), but about half of this group (45%) admitted that they have not started planning for their retirement.

“In last year’s RMFLS, we saw that a large majority of Malaysians finally realised the true value of an emergency fund. But the prolonged pandemic continues to take a huge toll on the economy and finances for everyday Malaysians. It’s disheartening to see this play out in the way Malaysians are less able to save, but fortunately, savings isn’t the only avenue for money management. We at RinggitPlus will continue doing our part in educating and empowering Malaysians to make better financial decisions through a holistic approach, which also includes better debt management and other ways to grow their money,” Hann Liew, Co-founder and Director of RinggitPlus, said.

Savings aside, Malaysians are also open to growing their money through automated investments such as cryptocurrencies and robo-advisors. Almost half (49%) of Malaysians said that they are willing or open to investing in cryptocurrencies.

The survey received 3,033 responses nationwide, from which stratified sampling of 1,518 was conducted to achieve a more representative sample of the Malaysian population.

RMFLS 2021: Key Findings

The general pattern of personal finance habits have not changed significantly. If anything, the rate that Malaysians are saving has even dropped – possibly due to the economic effects of the Covid-19 pandemic.
Only 15% of respondents are able to save RM1,500 or more each month, a reduction from 20% in 2020.
Half (50%) of the respondents revealed that they would not survive more than 3 months if they lose their job.
44% spend exactly or more than what they earn, similar to 43% in 2020.
21% have either taken or are planning to take a loan moratorium, which is 2x more than the industry estimates.
Credit card ownership dropped this year: 45% do not own any (35% in 2020), 45% carry 1-3 cards (from 51%), while only 10% own more than 4 cards (previously 14%).
E-wallet adoption remains relatively healthy in Malaysia at a rate of 89%. 36% even use 3 or more different e-wallets for their payments.
Despite efforts to encourage users to purchase insurance online, the majority of Malaysians 65% still prefer buying via an agent.
Youths and millennials (18-35 years) still have a long way to go.
- 24% do not have enough to survive beyond 1 month.
- 57% cannot survive more than 3 months.
- 45% spend exactly or more than what they earn.
Being more digital savvy, more than half (63%) of youths are willing or open to investing in cryptocurrencies.

Empowering Malaysians to make better money decisions

While Malaysians are showing interest in learning about better financial habits, it is also apparent that many may not know where to start. To address this gap, RinggitPlus is launching two new services – the RinggitPlus Financial Planning Services and the RinggitPlus Financial Health Check – to empower Malaysians to be more financially literate.

The RinggitPlus Financial Planning Services comes in two forms, RinggitPlus Academy and RinggitPlus Financial Planner, which offer access to licensed financial planners and practical money management advice at an affordable rate. The webinars and one-on-one consultations are done completely online, making it convenient and accessible for everyday Malaysians nationwide. This launch comes in conjunction with Financial Literacy Month through the partnership with Financial Education Network (FEN). For the month of October, Malaysians can sign up for the RinggitPlus Financial Planning Services and enjoy a RM100 discount using the promo code “FLM100”.

“It’s a common misconception that only the rich can afford to work with a financial planner and reap the financial rewards, but the truth is that anyone can benefit from the guidance and support of a financial planner – whether you’re a fresh grad, newly wed, new parent, or nearing retirement. It’s all about equipping yourself with the right tools and thinking in order to manage your money wisely. Our goal with these new products and services is to make financial advice more accessible to everyone, be it through our licensed financial planners on RinggitPlus Financial Planning Services or through our comprehensive algorithmic framework in the RinggitPlus Financial Health Check, which we have co-developed with mangro, a solution offered by kipleX,” Hann added.

The RinggitPlus Financial Health Check is Malaysia’s very first financial assessment and recommendation tool that’s easy to use for everyday Malaysians. It creates customised assessments of the user’s financial health and offers advice for 7 key financial areas – Tax Planning, Debt Management, Cash Flow, Investment, Goals, Estate Planning, and Risk Management. All it takes is just 10 minutes to get an overview of their financial health and recommendations on how they can make better money decisions.

“Many Malaysians do not have enough time or money to engage personal accountants and financial advisors, but they desperately need guidance with their finances. In today’s increasingly digital society, Malaysians expect better digital tools to help them understand, manage and plan their own finances, and we are excited to partner with RinggitPlus in building the self-serve financial tools of tomorrow.” said Stan Zabolotsky, Head of Ventures at kipleX, the venture builder behind mangro.

For Financial Literacy Month, RinggitPlus is also working with FEN to organise various initiatives to improve the level of financial literacy in the country, including a webinar on the importance of financial planning in all 3 languages. You can find out more on: https://www.fenetwork.my/.

Click here to download the full RMFLS 2021 report.

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