{"id":16675,"date":"2024-06-25T13:44:38","date_gmt":"2024-06-25T05:44:38","guid":{"rendered":"http:\/\/v3articles.imoney.my\/?p=16675"},"modified":"2024-06-25T16:28:59","modified_gmt":"2024-06-25T08:28:59","slug":"7-reasons-why-malaysians-dont-save","status":"publish","type":"post","link":"https:\/\/www.imoney.my\/articles\/7-reasons-why-malaysians-dont-save","title":{"rendered":"Have A Problem With Saving Money? You Are Not Alone"},"content":{"rendered":"

Do you have a problem with saving money? You are not alone.<\/p>\n

It’s the end of the month and you are broke\u00a0 or down to your last RM100 ringgit to stretch till the next payday. Is it time to ask yourself if you have a problem with saving money?<\/p>\n

We all have our excuses or reasons for why we can\u2019t save. The only way to overcome this difficulty is to realise and identify the problem first. Then, we should work towards eliminating our excuses and working to find better solutions.<\/p>\n

A study<\/a> by PIDM revealed that 55% of Malaysians have less than RM10,000 in available savings to fall back on when faced with an emergency. One key factor is that many people only save when they can instead of regularly.<\/p>\n

In order to overcome this biggest saving hurdle, we must understand the cause.<\/p>\n

Here are the top excuses that are perhaps unique to Malaysians for not saving money\u2014and how you can bust them to build your financial stability.<\/p>\n

<\/span>Lack of financial literacy<\/span><\/h2>\n

People with higher financial literacy will assume greater responsibility for their financial well-being. For example, individuals need to determine not only how much to save for retirement, but also how to allocate the retirement wealth wisely. They can learn about budgeting and saving to manage expenses and debt. Indeed, financial literacy is an essential living skill for all of us to build financial security and achieve financial well-being.<\/p>\n

However, individuals with low financial literacy are less likely to take calculated risks and invest their money in stocks. Many have also fallen prey to financial scams and lost their life savings.
\n

Quick tips<\/div>
You must stop telling yourself this excuse. There are so many fantastic resources at your disposal that will help you boost your financial education.<\/div><\/div>On the bright side, if you\u2019re reading this article then you\u2019re on the right track!
\nTake the initiative and start reading up on personal finance and how money works in the real world. Seek help from trusted professionals and don\u2019t be afraid to ask questions.<\/p>\n

<\/span>Servicing multiple debts<\/span><\/h2>\n

Another reason that prevents people from saving money is the continual need to play catch up on their debts. You most likely fall into this category if you owe massive amounts of debts \u2013 credit card, student loan, personal loan, housing loan and\/or car loan.<\/p>\n

The worst part about this position is that it is hard to get ahead. Once you are behind, it makes it that much harder to reverse things unless you make drastic changes.<\/p>\n

According to the Malaysia Department of Insolvency, 13 Malaysians are declared bankrupt<\/a> every day, with the majority of them being under the age of 44. The top reasons cited for bankruptcy are inability to pay off\u00a0 personal loans, business loans and car loans, .<\/p>\n

For example, it is highly possible for an average Malaysia earning RM4,000 to service debts worth RM3,700 every month:<\/p>\n

<\/a>\n\n\n\n\t\n\n\t\n\t\n\t\n\t\n\t\n\n\t
<\/th>Monthly repayment<\/th>\n<\/tr>\n<\/thead>\n
Credit card<\/td>RM500<\/td>\n<\/tr>\n
Student loan<\/td>RM200<\/td>\n<\/tr>\n
Personal loan<\/td>RM300<\/td>\n<\/tr>\n
Housing loan <\/td>RM2,000<\/td>\n<\/tr>\n
Car loan<\/td>RM700<\/td>\n<\/tr>\n<\/tbody>\n
Total<\/th>RM3,700<\/th>\n<\/tr>\n<\/tfoot>\n<\/table>\n<\/p>\n

Sure, you need to repay your debt. But it\u2019s not the only financial priority that deserves your attention. Your twenties and thirties are your prime saving years. A ringgit saved today can be more than a ringgit earned tomorrow \u2013 thanks to the power of compound interest over time.
\n

Quick tips<\/div>
You can put the bulk of the money available each month toward debt repayment. But still set aside 10% to 20% for savings. It\u2019s okay to work towards more than one financial goal at a time.<\/div><\/div>It\u2019s important to know how to clear your debts effectively so you can start saving quicker. Here are some effective methods!<\/a><\/p>\n

<\/span>Low financial incentive for saving<\/span><\/h2>\n

Savings and fixed deposit (FD) accounts do not yield returns as much as investments do. The maximum interest rate offered is only about 4% per annum, which may come with various terms and conditions. If that\u2019s not bad enough, current inflation rate stands at about 1.8% \u2013 and this means the effective interest rate we earn from our savings is only 2.2%.<\/p>\n

Some may still stick to savings and FDs as they have a low tolerance for risk and is dead afraid that they will lose all their hard-earned money in investments. However, understanding how an investment works can help you take calculated risks when it comes to growing your money through investments. Consider investments like unit trust<\/a>, REITs and share trading<\/a> if you are looking for higher yield for your savings.
\n

Quick tips<\/div>
Savings or FDs accounts can be good to put some of your savings intended for emergency as they are more liquid than investments. They are a place to stash away your cash so that you do not use it until you really need it.<\/div><\/div><\/p>\n

<\/span>“I will start saving next month”<\/strong><\/span><\/h2>\n

This is another huge financial mistake. Procrastination can be very costly; for example, if you save RM100 per month for 25 years at an interest rate of 3% you will accumulate RM44,712. If you chose to start saving later, and you saved for 15 years instead, you would only have accumulated RM22,754. This is the advantage of compounding interest. And this is a really conservative example!<\/p>\n

Quick tips<\/div>
If you start saving<\/a> earlier, you can get away with making smaller monthly contributions to your nest egg than if you waited and tried to play catch up down the road.<\/div><\/div>Let compound interest<\/a> do the heavy lifting for you!<\/p>\n

<\/span>Having the wrong concept of saving<\/strong><\/span><\/h2>\n

In past years, whenever there is a hike in petrol prices, we can see Malaysians queuing up at the petrol station to fill petrol the night before the price rise. They somehow believe that they are saving money on petrol \u2013 which is a misconception altogether.<\/p>\n

What happens if a Toyota Vios driver decided to fill up a full tank before a petrol hike of RM0.10 for RON95? Before the price hike, his full tank would have cost him RM87.75 (RM1.95 x 45 litres). After the price hike, it would cost him RM92.25 (RM2.05 x 45 litres). So, he would have made a one-time saving of RM4.50 only.<\/p>\n

That may just be enough for a plate of mixed rice with two dishes. Look for real ways to save instead of focusing on the petty things.
\n

Quick tips<\/div>
If you are really looking forward to save money on petrol, consider driving at a moderate speed, avoiding congested zones, or dump the car whenever you can and start walking or taking public transport. <\/div><\/div>These real money saving tips will definitely help you save hundreds a month.<\/p>\n

<\/span>Malaysians love to hang out in shopping malls<\/span><\/h2>\n

Not shopping is probably a tough thing to do for most Malaysians. With shopping malls at almost every neighbourhood, pasar malam, warehouse sales every weekend, cutting off spending can be truly torturous.<\/p>\n

And this is probably the number one cause for Malaysians\u2019 inability to save money. As Malaysians we are always spoilt for choices, from food, entertainment or branded items. A friends gathering never goes away without an eat-out or sales never swing by without us taking advantage of that.<\/p>\n

You can always enjoy a better television or a newer car, but splurging on the latest models can be a very expensive (and unnecessary) habit. You should only upgrade when your current item, be it smartphone or TV, is broken, not every time a newer model comes out. This is a result of the mentality that believes your money is yours to spend (now).
\n

Quick tips<\/div>
Prioritise your spending and buy according to your needs and not wants. When there is a sale, it does not automatically mean that you must buy something. Buy only if you really need something. <\/div><\/div>Anytime you must spend, think thrice if you can do without it. And the money you put into savings is the highest priority \u201cspending\u201d you can do. Pay yourself first, and then use what\u2019s left over to purchase something you want.<\/p>\n

Don\u2019t let these excuses stop you from saving for the rest of your life. If you don\u2019t, you won\u2019t achieve what you want. Or worse, if something bad happens, you\u2019ll be completely exposed financially.<\/p>\n

Identify your common excuses that stop you from saving and start taking proactive steps in overcoming your stumbling blocks. Once you have done that, you may find saving money much easier to accomplish. It may not be easy, but it is possible and it is well worth it, because saving gives you peace of mind and financial independence.<\/p>\n

This article has been updated on June 25, 2024.<\/em><\/h6>\n","protected":false},"excerpt":{"rendered":"

When it comes to good money management habits, excuses for why we do not save can become endless! <\/p>\n","protected":false},"author":1,"featured_media":63976,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[242,28,254,218,308,29],"tags":[660,2379,766,422,299],"class_list":["post-16675","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-debt-management","category-fixed-deposit","category-income","category-money-management","category-saving-tips","category-savings-account","tag-investment","tag-mdi","tag-money-management","tag-pidm","tag-savings"],"acf":[],"yoast_head":"\nWhy Malaysians Don\u2019t Save (And Tips To Save More)<\/title>\n<meta name=\"description\" content=\"When it comes to good money management habits, excuses for why we do not save can become endless! Here's what you can do.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.imoney.my\/articles\/7-reasons-why-malaysians-dont-save\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Why Malaysians Don\u2019t Save (And Tips To Save More)\" \/>\n<meta property=\"og:description\" content=\"When it comes to good money management habits, excuses for why we do not save can become endless! Here's what you can do.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.imoney.my\/articles\/7-reasons-why-malaysians-dont-save\" \/>\n<meta property=\"og:site_name\" content=\"iMoney Malaysia\" \/>\n<meta property=\"article:published_time\" content=\"2024-06-25T05:44:38+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-06-25T08:28:59+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.imoney.my\/articles\/wp-content\/uploads\/2015\/06\/25151129\/malaysians-dont-save.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"628\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"iMoney Editorial\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"iMoney Editorial\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"7 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.imoney.my\/articles\/7-reasons-why-malaysians-dont-save\",\"url\":\"https:\/\/www.imoney.my\/articles\/7-reasons-why-malaysians-dont-save\",\"name\":\"Why Malaysians Don\u2019t Save (And Tips To Save More)\",\"isPartOf\":{\"@id\":\"https:\/\/www.imoney.my\/articles\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.imoney.my\/articles\/7-reasons-why-malaysians-dont-save#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.imoney.my\/articles\/7-reasons-why-malaysians-dont-save#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.imoney.my\/articles\/wp-content\/uploads\/2015\/06\/25151129\/malaysians-dont-save.jpg\",\"datePublished\":\"2024-06-25T05:44:38+00:00\",\"dateModified\":\"2024-06-25T08:28:59+00:00\",\"author\":{\"@id\":\"https:\/\/www.imoney.my\/articles\/#\/schema\/person\/2dc429bac9840e75ad08ab242c57dcbb\"},\"description\":\"When it comes to good money management habits, excuses for why we do not save can become endless! Here's what you can do.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.imoney.my\/articles\/7-reasons-why-malaysians-dont-save#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.imoney.my\/articles\/7-reasons-why-malaysians-dont-save\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.imoney.my\/articles\/7-reasons-why-malaysians-dont-save#primaryimage\",\"url\":\"https:\/\/static.imoney.my\/articles\/wp-content\/uploads\/2015\/06\/25151129\/malaysians-dont-save.jpg\",\"contentUrl\":\"https:\/\/static.imoney.my\/articles\/wp-content\/uploads\/2015\/06\/25151129\/malaysians-dont-save.jpg\",\"width\":1200,\"height\":628,\"caption\":\"malaysian savings\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.imoney.my\/articles\/7-reasons-why-malaysians-dont-save#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.imoney.my\/articles\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Income\",\"item\":\"https:\/\/www.imoney.my\/articles\/category\/income\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"Have A Problem With Saving Money? You Are Not Alone\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.imoney.my\/articles\/#website\",\"url\":\"https:\/\/www.imoney.my\/articles\/\",\"name\":\"iMoney Malaysia\",\"description\":\"Everything you need to know about improving your personal finances.\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.imoney.my\/articles\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.imoney.my\/articles\/#\/schema\/person\/2dc429bac9840e75ad08ab242c57dcbb\",\"name\":\"iMoney Editorial\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.imoney.my\/articles\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/4268d61be86ba47b656e314b503a5c2f?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/4268d61be86ba47b656e314b503a5c2f?s=96&d=mm&r=g\",\"caption\":\"iMoney Editorial\"},\"description\":\"iMoney Editorial Team is composed of 4 writers with wide-ranging interests and areas of expertise. Their primary responsibility is to write financial-related articles to share and educate Malaysians on how to save, make and grow their money.\",\"sameAs\":[\"http:\/\/www.imoney.my\"],\"url\":\"https:\/\/www.imoney.my\/articles\/author\/chinglee\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Why Malaysians Don\u2019t Save (And Tips To Save More)","description":"When it comes to good money management habits, excuses for why we do not save can become endless! Here's what you can do.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.imoney.my\/articles\/7-reasons-why-malaysians-dont-save","og_locale":"en_US","og_type":"article","og_title":"Why Malaysians Don\u2019t Save (And Tips To Save More)","og_description":"When it comes to good money management habits, excuses for why we do not save can become endless! Here's what you can do.","og_url":"https:\/\/www.imoney.my\/articles\/7-reasons-why-malaysians-dont-save","og_site_name":"iMoney Malaysia","article_published_time":"2024-06-25T05:44:38+00:00","article_modified_time":"2024-06-25T08:28:59+00:00","og_image":[{"width":1200,"height":628,"url":"https:\/\/static.imoney.my\/articles\/wp-content\/uploads\/2015\/06\/25151129\/malaysians-dont-save.jpg","type":"image\/jpeg"}],"author":"iMoney Editorial","twitter_card":"summary_large_image","twitter_misc":{"Written by":"iMoney Editorial","Est. reading time":"7 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.imoney.my\/articles\/7-reasons-why-malaysians-dont-save","url":"https:\/\/www.imoney.my\/articles\/7-reasons-why-malaysians-dont-save","name":"Why Malaysians Don\u2019t Save (And Tips To Save More)","isPartOf":{"@id":"https:\/\/www.imoney.my\/articles\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.imoney.my\/articles\/7-reasons-why-malaysians-dont-save#primaryimage"},"image":{"@id":"https:\/\/www.imoney.my\/articles\/7-reasons-why-malaysians-dont-save#primaryimage"},"thumbnailUrl":"https:\/\/static.imoney.my\/articles\/wp-content\/uploads\/2015\/06\/25151129\/malaysians-dont-save.jpg","datePublished":"2024-06-25T05:44:38+00:00","dateModified":"2024-06-25T08:28:59+00:00","author":{"@id":"https:\/\/www.imoney.my\/articles\/#\/schema\/person\/2dc429bac9840e75ad08ab242c57dcbb"},"description":"When it comes to good money management habits, excuses for why we do not save can become endless! Here's what you can do.","breadcrumb":{"@id":"https:\/\/www.imoney.my\/articles\/7-reasons-why-malaysians-dont-save#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.imoney.my\/articles\/7-reasons-why-malaysians-dont-save"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.imoney.my\/articles\/7-reasons-why-malaysians-dont-save#primaryimage","url":"https:\/\/static.imoney.my\/articles\/wp-content\/uploads\/2015\/06\/25151129\/malaysians-dont-save.jpg","contentUrl":"https:\/\/static.imoney.my\/articles\/wp-content\/uploads\/2015\/06\/25151129\/malaysians-dont-save.jpg","width":1200,"height":628,"caption":"malaysian savings"},{"@type":"BreadcrumbList","@id":"https:\/\/www.imoney.my\/articles\/7-reasons-why-malaysians-dont-save#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.imoney.my\/articles\/"},{"@type":"ListItem","position":2,"name":"Income","item":"https:\/\/www.imoney.my\/articles\/category\/income"},{"@type":"ListItem","position":3,"name":"Have A Problem With Saving Money? You Are Not Alone"}]},{"@type":"WebSite","@id":"https:\/\/www.imoney.my\/articles\/#website","url":"https:\/\/www.imoney.my\/articles\/","name":"iMoney Malaysia","description":"Everything you need to know about improving your personal finances.","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.imoney.my\/articles\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.imoney.my\/articles\/#\/schema\/person\/2dc429bac9840e75ad08ab242c57dcbb","name":"iMoney Editorial","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.imoney.my\/articles\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/4268d61be86ba47b656e314b503a5c2f?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/4268d61be86ba47b656e314b503a5c2f?s=96&d=mm&r=g","caption":"iMoney Editorial"},"description":"iMoney Editorial Team is composed of 4 writers with wide-ranging interests and areas of expertise. Their primary responsibility is to write financial-related articles to share and educate Malaysians on how to save, make and grow their money.","sameAs":["http:\/\/www.imoney.my"],"url":"https:\/\/www.imoney.my\/articles\/author\/chinglee"}]}},"_links":{"self":[{"href":"https:\/\/www.imoney.my\/articles\/wp-json\/wp\/v2\/posts\/16675"}],"collection":[{"href":"https:\/\/www.imoney.my\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.imoney.my\/articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.imoney.my\/articles\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.imoney.my\/articles\/wp-json\/wp\/v2\/comments?post=16675"}],"version-history":[{"count":17,"href":"https:\/\/www.imoney.my\/articles\/wp-json\/wp\/v2\/posts\/16675\/revisions"}],"predecessor-version":[{"id":63978,"href":"https:\/\/www.imoney.my\/articles\/wp-json\/wp\/v2\/posts\/16675\/revisions\/63978"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.imoney.my\/articles\/wp-json\/wp\/v2\/media\/63976"}],"wp:attachment":[{"href":"https:\/\/www.imoney.my\/articles\/wp-json\/wp\/v2\/media?parent=16675"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.imoney.my\/articles\/wp-json\/wp\/v2\/categories?post=16675"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.imoney.my\/articles\/wp-json\/wp\/v2\/tags?post=16675"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}