Malaysia ranked 20th out of 31 countries that were tested on financial knowledge, attitudes, and behaviour, according to the OECD’s 2016 report mentioned in an article by The Edge Markets. 70% of those declared bankrupt were individuals between the ages of 35 and 45.
In his letter to The Star, Fomca President Prof Datuk Dr Marimuthu Nadason urged the new government to improve financial education, as more and more Malaysian consumers are getting into serious financial problems due to poor financial knowledge, among other things.
The Credit Counselling and Debt Management Agency (AKPK) is the most popular choice for many Malaysians saddled with debt and financial issues due to the free services offered.
The government-linked agency offers four different financial education modules based on one’s current life stage, in addition to financial counselling and debt management programme services.
Check out the four different financial education modules and the debt management programme offered by the AKPK:
Module 1 – Tertiary: Financial literacy for young adults
A new Asian Institute of Finance (AIF) study revealed that Malaysian millennials experience significant financial stress early in their lives, with many living beyond their means and trapped in emotional spending.
Pursuing your education at a tertiary level can be exciting, challenging, and also financially risky. Being on your own means you’ll need to manage your own finances. Without the right knowledge and skills, it can be hard to do so.
This module targets young adults or university students in managing their cash flow, budgeting, and saving. The module also teaches you how to deal with internet banking and manage your debt. Get ahead of your peers and be financially savvy!
Module 2 – Entering Workforce: Practical financial education for those who’ve just entered the workforce
In an AIF study, they found that 75% of consumers aged 20-33 had at least one long-term debt and 37% had more than one long-term debt. A study by Fomca also found that 47% of young workers were excessively indebted.
In this module, young workers will be exposed to different types of debts and learn about the importance of productive borrowing (so they won’t be burdened with too many financial commitments) and will be taught how to make long-term financial planning and how to manage debt. The module also highlights the importance of insurance and investment basics.
Even if you have been in the workforce for a long time, you might still find this module to be beneficial, especially if you plan to have a family in the future.
Module 3 – Starting and Raising a Family: Practical education for the new and young families
According to the Malaysian Human Development report, 53% of Malaysian households have no financial assets while 88% of households reported zero savings. Making things worse is the low income level of Malaysians, where the median salary for individuals is RM1,700 per month, according to Khazanah Research Institute.
It’s emotionally and financially challenging to start and raise a family, particularly with the rising cost of living in Malaysia while the income level remains low. Being financially aware and prepared puts you at an advantage.
For those thinking about starting and raising a family, this module highlights the ratio of a healthy debt, how to reduce financial commitments (to allow for retirement planning), and how to make the right investments to earn passive income when you retire.
Module 4 – Retirement: Comprehensive financial and retirement plan for pre-retirees
According to the Department of Statistics, the average Malaysian life expectancy is 75 years, with women being expected to live until the age of 77, and 72 for men. This indicates that you’ll need to have enough savings that will last you 15 to 20 years after you retire.
Unfortunately, 50% of retirees would exhaust their savings within the first five years of retirement, based on an EPF report. Some of the main factors to this include poor medical condition, early retirement, an insufficient fund in the EPF account, and low income.
This module will guide you in creating a comprehensive financial and retirement plan, so you’ll be able to live comfortably in your golden years and to avoid becoming a financial burden to your family.
5. Debt Management Programme (DMP)
For those who need urgent assistance, consider joining the Debt Management Programme (DMP), which is AKPK’s most popular service. Through the programme, you’ll work alongside financial counsellors to develop a personalised debt repayment plan. You can make your application online.
If you’re too busy to visit the agency in person, you can download the Self-Help Guide for Debt Relief Plan, which is available in English, Malay, and Mandarin.
Related: 5 Useful Tips to Become Debt-Free
Other things to check out
AKPK also provides a one-to-one counselling service on financial management, including how to budget and how to manage your cash flow. They’ll also advise you on credit-related issues. Check out their online educational resources if you’re interested in learning more about financial management in your free time.
This upcoming Thursday, September 27, the agency will be organising a public programme called ‘Be Your Own Boss’, held at Lanai Kijang. The event will talk about how to be employable and financially savvy.
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