KUALA LUMPUR, July 30 (Bernama) — The mindset of “getting a salary, spend” should be replaced with “getting a salary, building finances”, particularly among youths, to help foster a financially literate society and ensure a more secure future.
Financial experts have expressed concern over the rising trend among urban youths, particularly young professionals, who are spending beyond their means in the pursuit of instant gratification.
According to the Malaysian Department of Insolvency (MdI), as of June 2025, there were 119,297 active bankruptcy cases nationwide, with the majority involving individuals aged between 35 and 44, totalling 10,336 cases or 39.7 per cent.
MdI Bankruptcy Division principal insolvency officer, Zarina Alias, said a total of 26,060 new cases were registered between 2021 and June 2025, with all cases still under the department’s administration.
“The main factor leading to bankruptcy is personal loans, which account for 47.62 per cent of cases, followed by business loans and vehicle financing. Personal loans are often used to cover existing debts or to pay for everyday expenses, including weddings and home renovations,” she said.
“Affordability should be measured by whether we can truly afford the item. For example, when choosing between a regular and a designer handbag, is it truly essential or merely something we want? Young people must cut their coat according to their cloth,” she told Bernama recently.
Zarina said that although students today were drawn to luxury items such as mobile phones, gadgets and cars, financial management must remain a priority.
Meanwhile, International Islamic University Malaysia Economics Department senior lecturer, Associate Professor Dr Muhammad Irwan Ariffin, said a recent report by Bank Negara Malaysia (BNM) and the Credit Counselling and Debt Management Agency (AKPK) revealed that Malaysians’ financial literacy remained at a worrying level, particularly in terms of savings management and preparedness for financial emergencies.
“According to BNM reports from 2021 and 2024, around 50 per cent of Malaysians lack the financial resilience to survive for three months without income. Only 24 per cent have enough savings to last beyond that, which is significantly below international standards,” he said.
He noted that the ‘Fear of Missing Out’ (FOMO) culture, which pushes youths to spend for the sake of keeping up with trends, should be replaced with the ‘Joy of Missing Out’ (JOMO), which reflects satisfaction in making decisions based on personal values and goals.
“Change the mindset of ‘my friends are buying, so I have to buy too’ to ‘I buy based on my budget and needs’. Lifestyles need not be standardised, what matters is that they are comfortable and sustainable.
“Good financial habits can be developed through practices like ‘paying yourself first’, which means setting aside a portion of your salary for savings before spending on daily necessities,” he said.
Muhammad Irwan said that as a general guideline, monthly income could be divided into 50 per cent for essentials, 30 per cent for non-essentials, and 20 per cent for savings or investments, but emphasised that this might vary depending on a person’s financial commitments.
He said that separating savings into categories such as emergency funds, education and religious expenses would help individuals plan more effectively and avoid unexpected financial difficulties.
“For education savings, platforms such as the National Education Savings Scheme (SSPN) or Amanah Saham Bumiputera (ASB) offer stable returns in the long term, while a Tabung Haji account is suitable for religious purposes as it is syariah-compliant, provides competitive returns and is zakat-deductible,” he said.
Muhammad Irwan added that young Muslims should strike a balance between worldly and spiritual needs by including haj savings as part of their long-term financial planning, alongside goals such as emergency and education funds, to reflect a structured approach to fulfilling religious obligations.
“If we look at it, the cost of performing the haj is rising and could realistically reach up to RM60,000 by 2035, based on current trends. This is mainly due to economic reforms by the Saudi Arabian Government such as VAT, visa fees, and increases in accommodation, food and transport costs.
“The second factor is the ringgit’s fluctuating value compared to the Saudi riyal, which has a direct impact on the costs borne by Malaysian pilgrims,” he said.
Malaysian Youth Council fellow Adli Amirullah was of the view that the concept of qanaah, or contentment, should form the core of financial education to encourage more ethical and sustainable financial culture among youths.
“In this context, young people must also understand the concept of wasatiyyah, which is about striking a balance – being content with what we have, while continuing to strive to earn more not just for ourselves, but to help others in need and, most importantly, to fulfil the fifth pillar of Islam,” he said.
Adli also believed that offering incentives such as tax relief to young people saving for the haj could serve as a catalyst to instil more disciplined and long-term financial habits.
“If tax relief through SSPN can encourage education savings, a similar approach should be considered for haj savings, especially among the youth. Knowing that there are short-term incentives like tax rebates may motivate them to start saving early,” he said.
Dean of the Faculty of Islamic Studies at Universiti Kebangsaan Malaysia, Prof Datuk Dr Mohd Izhar Ariff Mohd Kashim, advised young people to start financial planning early, including for the haj, by saving even a small amount such as RM50 a month.
He said automatic deductions from their salary would help instil financial discipline and ensure consistent haj savings.
–BERNAMA