6th December 2022 - 6 min read
As the world braces itself for a recession and continued inflation in 2023, Malaysians are in their worst-ever financial position to prepare for it. Data from the RinggitPlus Malaysian Financial Literacy Survey (RMFLS) 2022 revealed various painful truths on the current financial state of the rakyat, including depleted savings, cashflow issues, and other worrying trends.
Malaysians from all walks of life are now facing severe financial challenges that leave them vulnerable to financial shocks, as various financial aids reduced the impact in 2020 and 2021. 70% of respondents indicated that they save less than RM500/month or do not manage to save at all. This is the worst-ever result tracked by the RMFLS in 5 years.
At the other end of the spectrum, the amount of Malaysians who manage to save more than RM1,500 per month has also dropped significantly. From 20% in 2020, the figure has dropped four times lower to just 5% in 2022.
The RMFLS 2022 results also indicate that more Malaysians are struggling with less savings in hand, as 63% of respondents stated that they can survive for 3 months or less with only their savings (52% last year). A similar pattern is also seen where 55% of Malaysians spent exactly or more than what they earned each month (44% last year), essentially living paycheck-to-paycheck.
With depleted savings and higher cost of goods, the survey also highlighted a worrying trend where more credit cardholders are not paying off their bills in full – just 55% in 2022 compared to 70% last year.
With the challenges in cashflow and savings, the survey results show that Malaysians are choosing short-term monetary relief over long-term financial stability. A staggering 65% of respondents above 21 stated that they will consider applying for more Employees’ Provident Fund (EPF) withdrawals if the government allows it.
In addition, the survey also found that 52% of Malaysians above the age of 18 have not started investing. Meanwhile, a majority of those who are investing have low-risk appetites but medium-term investment horizons which is not optimal – though these may be influenced by current financial challenges and global economic outlooks.
“The financial effects of the pandemic have been devastating and our survey findings this year reaffirm that Malaysians have real financial challenges to address. It is a harsh reality not only for the rakyat, but also for policymakers and industry players – this is a generational issue that requires long-term solutions with sustained and concerted support from all parties. We cannot leave anyone behind,” said Hann Liew, Co-Founder and Director of RinggitPlus.
In line with this, RinggitPlus recently introduced a new section to its Savings vertical on RinggitPlus.com that highlights the various cash management solutions in the market as it aims to encourage Malaysians to save and earn best-in-class returns. More products will be listed throughout 2023, and the section already includes an easy registration process through the RinggitPlus WhatsApp chatbot.
Finally, as part of its commitment towards enabling better access to financial literacy initiatives and education to more Malaysians, RinggitPlus will begin offering its content in Bahasa Malaysia in 2023.
“The new section on the Savings vertical at RinggitPlus.com is timely as it highlights a relatively new product line in the industry, and will help those looking to research and compare for the best savings products in the market. Meanwhile, offering our content in Bahasa Malaysia is part of our mission to extend our range of services to other languages and thus reach out to more Malaysians,” said Hann.
Financial literacy continues to be a major step towards helping Malaysians overcome financial challenges and take control of their financial health. As RMFLS celebrated its 5th anniversary, the annual survey continues to highlight the importance of financial literacy among Malaysians and provides data points that have been used by various organizations, education bodies, and governmental sectors towards guiding Malaysians to take control of their financial health.
Click here to download the full RMFLS 2022 report.
The RinggitPlus Malaysian Financial Literacy Survey 2022 was made possible by our strategic partners, including our main partner Amanah Saham Nasional Berhad (ASNB) and other partners Visa International, OCBC Bank, Experian Malaysia, and Atome Malaysia.
The nationwide survey was conducted in 3 languages using a self-administered online questionnaire through a third-party analytics platform, based on a statistically-accurate sampling of 3,144 Malaysians aged 18 and above.
Savings and Spendings
Other observations and trends
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Don’t be fooled. Malaysians are very good at hiding their wealth.
Wait, people actually saves RM500 per month on average? I need to rethink my finances now…
Maybe this is because I’m in my early 20’s and just started working, but I thought saving more thank RM300 is pretty good.
How do I even start getting my stuff in order? I’m overwhelmed by all of… this and honestly I don’t know what half of the acronym means.