![](\"https:\/\/static.imoney.my\/articles\/wp-content\/uploads\/2018\/10\/In-partnership-with-PIDM-300x85.jpg\")
<\/p>\n<\/p>\n
Impulse spenders, trend-seekers, lazy, entitled\u2026there\u2019s no end to the unflattering labels heaped onto millennials. Young Malaysians, in particular, have gotten a bad rap for prioritising self-gratification<\/a> over building up their savings.<\/p>\n But how bad is it, really?<\/p>\n What proportion of young Malaysians are actively saving money, and how much are they saving? Are millennials really spending all their disposable income on overpriced coffee and avocado toast?<\/p>\n That\u2019s what we\u2019ve tried to find out. In May, we ran a survey with Perbadanan Insurans Deposit Malaysia (PIDM) and 1,525 Malaysians, aged 24 to 35, responded to the survey to share their views with regards to saving money.<\/p>\n While this survey may not be representative of the entire millennial population in Malaysia, their responses can shed some light on what drives millennials to save money, the strategies they use in achieving their goals and the challenges they face in the process.<\/p>\n Here\u2019s what they told us.<\/p>\n Perbadanan Insurans Deposit Malaysia (PIDM) is a government agency that protects your bank deposits. In the unlikely event that your bank fails, PIDM will reimburse you with the money you have deposited (up to RM250,000). This protection is free and automatically provided \u2013 no application needed!<\/div><\/div>\n Most of our respondents (78%) said that they have been saving part of their income, although 34% of them only started saving one to two years ago.<\/p>\n However, they aren\u2019t shying away from working hard or making lifestyle changes in order to achieve their savings goals. Around half of our respondents have engaged in freelance work or side businesses, and some have reported downgrading their lifestyle or investing in education or personal development.<\/p>\n It\u2019s interesting to note that while millennials are not often considered long-term planners, at least 2 out of 5 respondents are already saving for retirement. This could be part of a larger trend of millennials being increasingly concerned with having adequate retirement savings \u2013 Private Pension Administrator Malaysia (PPA) found that the number of millennials who are private retirement scheme (PRS) contributors have been steadily increasing<\/a> in the past few years. As of 2017, they made up almost 27% of the total number of PRS contributors.<\/p>\n While our respondents generally have positive savings habits, their total savings are meagre.<\/p>\n The PIDM survey found that 37% of savers had total savings amounting to less than one month\u2019s income. This seems marginally better than the national average \u2013 in 2016, Khazanah Research Institute reported that<\/a> 50% of the country\u2019s urban households did not have any savings.<\/p>\n However, you should ideally have enough savings to last you at least a few months \u2013 this would be sufficient to help you recover from financial shocks such as a sudden job loss or a large emergency expense.<\/p>\n It\u2019s no surprise, then, that many savers (68%) in the PIDM survey are still trying to save for an emergency fund.<\/p>\n Why aren\u2019t more respondents saving, and why are they saving so little?<\/p>\n In short: low wages, rising cost of living and loan commitments.<\/p>\n The Employee Provident Fund\u2019s (EPF) expenditure guide<\/a> noted that the median wage in Selangor is RM2,580, but the minimum level of income required for a single person to live comfortably in the Klang Valley is RM1,870 (without a car) and RM2,490 (with a car). iMoney\u2019s own Monthly Budget Survey<\/a> found that the average monthly spending of a single, car-owning individual is RM2,695. For income-earners who fall in \u2013 or below \u2013 the median wage bracket, this doesn\u2019t leave a lot of room for savings.<\/p>\n Likewise, the PIDM survey found that among those with lower monthly salaries were less likely to be savers, suggesting that a key obstacle to saving is insufficient income.<\/p>\n Little wonder that 63% of non-savers feel that their income isn\u2019t enough for their needs.<\/p>\n When non-savers were asked why they found it difficult to save, the most commonly cited reasons were that the cost of living has been rising (61%) and that they still have loans to pay off (37%). Another 15% revealed that they did not know how to save.<\/p>\n Nevertheless, non-savers do strive to reach their savings goals. Around half of them (53%) engage in freelance work or side businesses, and 35% reported having to downgrade their lifestyles.<\/p>\n Even those who save are finding it hard to do so. Around half of our respondents (49%) who identify as savers found saving either difficult<\/em> or very difficult<\/em>. They echoed non-savers in citing the rising cost of living and loan commitments as obstacles to saving.<\/p>\n PIDM\u2019s protection plays a role. About 1 in 4 respondents (25%) said that a PIDM protection limit of more than the existing RM250,000 would encourage them to save more. In fact, if there were no PIDM protection, 50% of respondents said that they would put less money in banks, and 37% said they would not put any money at all. These numbers suggest that PIDM\u2019s protection could assure customers as to the safety of their deposits, and in turn encourage them to save more.<\/p>\n Around half of our respondents (52%) also said that being rewarded for reaching saving milestones would encourage them to save more money, while 42% said that they would be encouraged to save if someone helped customise a savings strategy for their personal goals.<\/p>\n Young Malaysians have cause to be optimistic, as there are now mobile phone apps and digital platforms that can \u2018gamify\u2019 their personal finance journeys. You could, for example, use an app to turn your savings goals into a mobile gaming experience. Some apps and platforms can also help you customise saving strategies to reach your financial goals. Millennials, many of whom are digital natives, would do well to leverage these services.<\/p>\n Generally, the young Malaysians who were surveyed have positive attitudes towards saving. They have high savings aspirations, and are willing to work hard or make lifestyle changes to achieve them.<\/p>\n On the flipside, their total savings are low. Economic forces \u2013 such as low wages and a rising cost of living \u2013 present major challenges to saving more. Compulsive spending and lack of financial know-how also make it hard for millennials to save. Despite these challenges, 80% of our respondents said that they feel in control of their finances.<\/p>\nWhat is PIDM<\/a>?<\/strong><\/p>\n![\"\"](\"https:\/\/static.imoney.my\/articles\/wp-content\/uploads\/2019\/07\/PIDM_survey_mini_infographics_2B3-01.png\")
<\/p>\n<\/span>Most of the respondents are savers<\/strong><\/span><\/h2>\n
![\"\"](\"https:\/\/static.imoney.my\/articles\/wp-content\/uploads\/2019\/07\/PIDM_survey_mini_infographics_2B2-02.png\")
<\/p>\n<\/span>Low savings<\/strong><\/span><\/h2>\n
![\"\"](\"https:\/\/static.imoney.my\/articles\/wp-content\/uploads\/2019\/07\/PIDM_survey_mini_infographics_2B2-03.png\")
<\/p>\n<\/span>Why is it so hard to save?<\/strong><\/span><\/h2>\n
![\"\"](\"https:\/\/static.imoney.my\/articles\/wp-content\/uploads\/2019\/07\/PIDM_survey_mini_infographics_2B2-04.png\")
<\/p>\n<\/span>What could encourage millennials to save more?<\/strong><\/span><\/h2>\n
<\/span>The bottom line<\/strong><\/span><\/h2>\n