Financial education should be made mandatory in Malaysian schools as part of our education system. Will the National Literacy Strategy launched by Tun Dr Mahathir change Malaysians’ financial lives?
Why Financial Education is Needed
- Financial education is a need as Malaysians are often embroiled in financial difficulties.
- Individuals, especially while young, need to have proper retirement planning and awareness to make sure sufficiency of funds in old age.
- A common misconception is that financial planning is just saving and managing your loans; but the hard truth is that there are a lot more details to cover for a thorough plan to secure your financial future when you reach an age where you have less earning power.
Hard Malaysians Financial Facts
- 52% of Malaysians find it difficult to raise even RM1,000 in emergency savings.
- 76% of Malaysians are unable to cover just 3 months of living expenses upon losing their primary source of income.
- 94% of Malaysians are unable to cover 6 months of living expenses!
- 75% of Malaysians aged 20 to 33 had at least one long-term debt and 37% had more than one long-term debt.
- 68% of Malaysians who retire at 55 do not have even RM240,000 in EPF monies and 70% spend it all upon withdrawal in 5 to 10 years.
- 70% of Malaysians declared bankrupt are aged between 35 to 45.
- AKPK sees approximately 10,000 to 15,000 Malaysians every month who are facing financial and debt challenges.
“It is necessary for Malaysian to manage finances in a smart manner and practice self-control from unnecessary spending.” ~Azaddin Ngah Tasir, AKPK CEO (translated from original in Malay)
Ideas on How to Improve Financial Literacy
- Introduce financial education into pre-school, primary and secondary school curricula over the next 5 years as part of the National Financial Literacy Strategy.
- Learning from other countries where children from as young as preschool are taught how to use money, save money, and donate money as part financial education and living responsibly.
- Public-private partnerships to collaborate for more impactful implementation of action plans under the National Strategy.
- Effective outreach and communications using simple and consistent messages through various channels with an emphasis on digitization.
- Improving access to financial products and services to make sure Malaysians have access to various financial products and services that meets their needs.