The Struggle to Save: High Monthly Commitments and Modest Incomes

Report claims that some individuals find it challenging to set aside savings due to high monthly commitments, as their income barely covers essential expenses.

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Nowadays, many individuals are compelled to take on multiple jobs to cope with the rising cost of living.

The responsibility of providing for the family is no longer exclusive to husbands; women now actively contribute to the family income.

This is primarily due to the fact that the income earned by certain individuals falls short of covering their monthly expenditures, making it almost impossible to save even a minimum of RM1,000 per month.

Limited Income and High Monthly Commitments – The Key Challenges

According to a survey by Kosmo, the average individual acknowledges that their monthly salary barely covers basic needs, leaving them with no savings — not even RM1,000.

“I’m not unwilling to save, but my salary barely covers daily expenses. Overtime pay is minimal, with deductions here and there,” says Zakaria Elias.

“Kais pagi makan pagi, kais petang makan petang. Malam tak ada,” adds Ramzi Morad.

Some individuals also find it difficult to save due to high monthly commitments.

Salim Muhammad, a private sector employee, admits that despite a monthly income of RM3,000, he cannot manage to save an emergency fund of RM1,000 due to monthly commitments amounting to RM2,800.

“Every month, I have to pay rent, settle bills, buy essential items, and cover my children’s school expenses.

That doesn’t include the cost of petrol and tolls for commuting to work. Sometimes, I have to tighten my belt as long as my children get enough food,” he states, as quoted by Kosmo.

Salim recognises the importance of saving but acknowledges that, particularly for individuals with lower incomes like himself, it’s far from a simple task.

The Majority of Malaysians Lack Emergency Savings

Social media surveys reveal that it’s not just half, but almost the entire Malaysian population that struggles to maintain an emergency fund of RM1,000.

“Correction, almost everyone (has no RM1,000 savings),” comments Nizal Ahmad.

Previously, Bank Negara Malaysia Governor Datuk Abdul Rasheed Ghaffour disclosed that nearly half of Malaysians face difficulties setting aside a minimum of RM1,000 for emergencies.

He further revealed that one in three Malaysians, based on research and financial assessments conducted since 2015, shows little interest in insurance and takaful.

These findings also indicate that one in three Malaysians carries debt, even though the majority of them possess moderate incomes.

Simultaneously, the RinggitPlus Malaysian Financial Literacy Survey 2023 (RMFLS), conducted by RinggitPlus, shows that 71% of respondents can only save RM500 per month.

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