For some, this means having little or no savings, even for emergencies, leaving them vulnerable to financial shocks.
Budgeting coach Nafisah Amran said this highlights the importance of returning to basic money-management principles, starting with a realistic budget and an emergency fund.
“Financial strength doesn’t come from complicated formulas; it starts with managing your income properly and not spending everything you earn,” she told Bernama.
Nafisah noted that many Malaysians still lack basic emergency savings. According to Bank Negara’s Financial Capability and Inclusion Demand Side Survey in 2024, 61% of Malaysians could not raise RM1,000 in an emergency – up from 47% in 2021.
She attributed part of the problem to the growing use of “buy now, pay later” (BNPL) facilities and small, recurring loans that appear manageable but gradually erode savings.
Data from Bank Negara showed BNPL transaction values rose sharply in the second half of 2024, reaching RM7.1 billion and continuing to climb last year, with millions of active users – most aged 21-45 and from the middle-income group.
“These small commitments add up and quietly weaken your financial resilience,” she cautioned.
Start small, stay consistent
Contrary to popular belief, Nafisah said an emergency fund does not need to start with six months’ worth of expenses.
“Begin small and build it gradually. What matters is consistency,” she said, adding that emergency savings should be based on essential monthly expenses, such as housing, food, transport and utilities, rather than salary size.
She also cautioned against rigidly following the popular 50:30:20 budgeting rule, which suggests allocating half of your after-tax income for needs, 30% for wants, and 20% for savings and debt repayment.
“If you can only save 5-10% at first, that’s fine. Don’t quit just because you can’t reach 20%,” she said, advising people to identify spending leakages and increase savings over time.
For savings to last, Nafisah stressed that money must be aligned with life goals. “When you understand your life phases – whether you’re single, raising children or planning ahead – you know when and why the money is needed,” she said.
She believes many families struggle not because of low income, but due to predictable large expenses such as school openings, festive seasons, insurance renewals and road tax.
Her solution? Sinking funds – money purposefully set aside over time to take care of a future expense or financial obligation.
“Save small amounts throughout the year for these expenses. When the season comes, you don’t touch your salary,” she advised.
Don’t just rely on aid
While government assistance can help ease short-term pressure, Nafisah warns against depending on it entirely.
“If assistance comes in, use it wisely – but your salary should still go into savings,” she said.
She also encourages tracking expenses and using salary increases, such as the recent civil-service pay adjustments, to settle arrears, build emergency funds, or invest – rather than upgrading lifestyles.
“Financial change doesn’t happen overnight. But once you break the unhealthy spending cycle, the benefits carry forward, even to the next generation,” Nafisah concluded.