KUALA LUMPUR: Forty percent of millennials are spending beyond their means, said Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz. (pix)
According to Bank Negara Malaysia, 47% of youths have high credit card debts, he said.
So think thoroughly about what is necessary and prioritise your purchases, whether it is a new outfit or new phone, and you will find that every ringgit will go a long way.
Warren Buffett said: Do not save what is left after spending, but spend what is left after saving. In other words, pay yourself first and use the power of compounding interest to your advantage, he said at the Kembara Bijak Wang 2020 (KBW 2020) prize-giving ceremony yesterday.
He said if a 20-year-old wants to have RM1 million in savings by the time he or she turns 60, assuming an annual return of 6%, he or she would need to save about RM500 per month.
According to the Employees Provident Fund (EPF), 50% of its members have less than RM200,000 in their accounts, lower than the average of RM240,000 that members should have in basic savings when they reach 55.
Tengku Zafrul also noted that 50% of contributors would exhaust their savings within five years of retirement, Bernama reported.
However, with the emergence of the gig economy such as Grab and Foodpanda, we have many opportunities and options to earn alternative sources of income to enhance our savings.
In that respect, I am very pleased to see many Malaysians taking up the challenge of starting their own business, he added.
He also advised Malaysians to strengthen their financial literacy skills, either on growing their wealth via investments or protecting their wealth through insurance or takaful.
Through events like KBW 2020, the goal of improving the financial wellbeing of Malaysians will become a reality, in line with the Malaysian National Strategy for Financial Literacy.
Tengku Zafrul said raising the level of financial literacy is a long-term commitment that requires sustained efforts and support of many parties.

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