How much savings is enough in future? RM3 million?

How much savings is enough in future? Ever wondered who could save us if we did not save enough?

Malaysians are definitely saving less these days

I think everyone knows that Malaysians are saving less today, right? We are saving less. Some say it’s because we are earning less. Erm… One major reason is also because we have more temptations today. We have better marketers who could do so many more things to tempt us to buy, buy and buy. We are now pressured by even more peer pressure. When the whole office have new smartphones, how could we continue with our 5 year old phone?

Cost of living, that’s why we are saving less

Some would say, but we spend more because cost of living is increasing, how to save? Erm… If that’s right, then everyone in Malaysia should be suffering and domestic consumption of goods and services would keep going down. In fact, new restaurants would stop to open because there’s just no demand… New car sales should also drop, right?

Surveys should be done in cafes instead

Perhaps in the future, all these surveys about savings should be conducted inside cafes and the few BRANDED smartphone retailers. As soon as any customer comes into a cafe or intends to buy a smartphone, do a survey about saving money with them. If their answer is that they do not save and did not save, ask them on the spot WHY were they drinking a RM15 latte or a buying a new smartphone of thousands of ringgit then?

Plus remind them to stop saying high cost of living, please. Anyway, for reference, here is a survey before the arrival of CoviOkay, now for the actual survey from Ringgitplus Malaysia Financial Literacy Survey 2019.

Article in Ringgitplus Malaysia Financial Literacy Survey 2019 revealed the following:

21% of Malaysians do NOT save their money

89% believes EPF savings are not enough for retirement

34% says they could not save because they have to pay debts

For those who did not save, 30% says essential expenses are just too high, 25% says they will save if they have balance at the end of the month.

The number of people who do not save are further segmented into three; second highest being 29.2% who believe that essential expenses are too high, leaving with too little amount to save; followed by 25.2% of respondents stating that they only save when there is enough balance at the end of the month. 12% meanwhile said it’s due to their lifestyle including shopping and entertainment.

For those who save, 35% saves less than RM500 per month, 23% saves between RM501 to RM1,000 and 13% could save between RM1,001 and RM2,000. 9% could save more than RM2,000 per month.

‘RinggitPlus’ CEO Liew Ooi Hann said, “The lack of awareness on personal finance is an ongoing challenge for us all. What’s more alarming is that people are in denial of their financial reality.” He added, “For example, we found that 54.6% of respondents aged 20 to 29 do not have a retirement plan.”

Where food spending is concerned, 54% of Malaysians spend RM20 or less per day, followed by RM20 – RM30 and 13% have no budgets for their meals. 3% spends RM30 – RM50.

For smartphone purchases, 52.7% of Malaysians would be willing to spend for a new phone with their credit card due to features like Easy Payment Plan and cashbacks, followed by 40.5% that would use cash instead. There are a lot more findings. Do read it here: Article in

Savings is just a starting point. What happens if we did not even start?

Saving is no longer enough. We need to save in order to invest wisely. Here’s an earlier article: Are we saving, earning, investing and preserving? We need to help more Malaysians understand that without financial planning, they are planning for financial ruin. Else, everyone continue to think of all the short cut ways; personal loans, more credit cards, renting better than buying and many more misconceptions.

Now, let’s look at life expectancy and retirement basis

In fact, if we look at it from a life expectancy and retirement basis, we will know why savings alone will not be enough. Retirement was 55 years old very long time ago. Life expectancy in 1960 was 60. It meant that savings needed to be enough after our retirement is just cover 5 years, averagely. Today, we may retire at 60 but are expected to live till 75 or older. Probably 80 years old in the very near future too. Savings now needed to be enough for 15 – 20 years. This is also why just savings alone is not enough, what more of those without any savings.

Please start saving today. That item you want to buy can wait.

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