Are Malaysians on the road to financial recovery yet?

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.

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.

“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 certified 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.

“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.

(This content is surmised from a press release)