Malaysians continue to spend beyond their means

PETALING JAYA: Every month, Liana Athirah forks out half of her salary on paying for her Toyota Vios, house rental, utility bills and necessities.

She also spends on accessories for her iPhone 6 and eating out as she has no time to cook, said the marketing executive.

As such, Liana said she hardly has any savings left but admitted she has the tendency to spend on unnecessary things.

“I do not know where my money goes after spending. But what I know is that I am left without money,” said the mother of one.

As a result of her spending beyond her means, Liana is forced to borrow from family and friends.

However, she keeps delaying paying them back as she simply cannot afford to do so. Sometimes, her total debt blossoms to RM2,000 in a month.

Unfortunately, Liana’s tendency to spend beyond her means is a predicament shared by many Malaysians who may be enjoying a higher standard of living but also paying a heavy price for it.

An experienced financial planner, Robert Foo, from MyFP Services Sdn Bhd, said people should manage their finances by first knowing their situation financially and also where they would be in the future.

“Only then can they know whether they will be in trouble or whether they will be all right in trying to achieve their life and financial goals,” he said.

Foo said that part of the reason people, especially those up to 30 years old, were in debt was because their income could not sustain what was considered a “normal” lifestyle at that age.

According to the Insolvency Department, a worrying trend was emerging among the country’s population, aged between 25 and 44, who made up the biggest number of those declared bankrupt.

They constitute almost 60% of the 94,408 bankruptcy cases reported from 2013 to August.

A report from the Institute of Strategic and International Studies (ISIS) recently said that Malaysians were now enjoying a much higher standard of living than ever before, based on the 2016 Household Expenditure Survey.

ISIS’ economics, trade, and regional integration director Firdaos Rosli said this trend was also proven with Malaysians preferring to buy foreign cars rather than lower-priced models by the two national carmakers.

The survey also showed that Malaysians were spending less on buying groceries and preferred to eat out instead.

Another aspect of higher living standard, according to the study, were the number of Malaysians going online to purchase a variety of products and services.

Firdaos had also referred to the growth in the mobile phone market in Malaysia as an indicator of a booming economy as well as of the ringgit’s decline not having any impact on the economy and the people.

“Bank Negara Malaysia data shows that in the first nine months of 2017, the value of mobile phones imported by Malaysia stood at RM6.85 billion.

“In fact, the value of mobile phone imports is higher than our top food imports such as rice, milk and cream, coffee, onions, garlic, coconuts, soybean and corn combined,” he had said.

Foo said Malaysians spending more on “fancy” electronic gadgets was to be expected as communication was now more dependent on mobile phone and other electronic devices.

He said those facing difficulty planning their finances should seek the help of experts who could advise them before they faced financial ruin.

Consumers Association of Penang (CAP) president SM Mohamed Idris said Malaysians should change their attitude and spend within their means.

“They live in a dream when they buy all the branded stuff which exceeds their monthly income. Soon, it will turn out to be a nightmare when they fail to pay their debts.

“The cost of living is very high nowadays. People should think first before they buy stuff or before they eat outside as prices are not cheap.” -FMT