More young Malaysians overspending and falling into debt

The Straits Times
Nov 17, 2011
More young Malaysians overspending and falling into debt

KUALA LUMPUR (THE STAR/ASIA NEWS NETWORK) - The desire to keep up with the Joneses' in an increasingly materialistic society is the main reason why most young Malaysians overspend.

Fomca chief executive officer Datuk Paul Selvaraj said most advertising was aimed at promoting high-end lifestyles and this created pressure on young people to buy things just so they would appear 'cool' or 'glamorous'.

'There is peer pressure and people buy things they cannot afford just to stay trendy.

'Many buy items more for their image than their functionality.'

Mr Selvaraj said Fomca had recently conducted a national survey on young workers' financial behaviour and habits. Preliminary findings revealed that more than 60 per cent were in debt, totalling about 15 per cent of their income.

These figures, Mr Selvaraj said, were a cause for concern.

He stressed that proper financial education was important to address the debt problem.

'Financial education should be made mandatory at every level.

'People need to have the right skills, knowledge and attitude to help them manage their finances.

'They need to start thinking about saving for the future.'

Psychologist Dr Goh Chee Leong said people associated owning material goods with happiness and this was a major reason why they did not live within their means.

'Many young working adults nowadays are afraid to be seen as falling behind with trends,' Dr Goh said. 'They end up buying things they don't want just to conform.'

Dr Goh, who is Dean of the Faculty of Behavioural Sciences at HELP University College, added that most young working adults had grown used to comfortable lives as students.

'They have an unlimited source of money from their parents and live a good life.

'However, when they try to continue this lifestyle as working adults, they run into trouble.'

Dr Goh recommended that Malaysians adopt a holistic view of life to curb their spending habits.

'We have to realise that happiness does not come from products,' he said.

'It comes from having good relationships with friends and family.

'If we change our views on what brings us fulfilment, it is very possible for us to find happiness and still live within our means.'

The msia government will just bail them out again.

recall in malaysia they have something called NEP or New Economic Policy.

This policy was introduced to eradicate poverty mostly for the bumiputras dedicating 30% of the economy for them, long story short this policy favored them and gave the commoner bumiputras sort of blank cheaque. They could walk into a bank borrow 100k ringgit without very much collateral, I remember reading that many used the money to buy cars fancy homes and purchase shares during the speculative years of the 90's. When the bubble popped in the form of asian economic crisis, I also remember reading maybank was saddled with something like 4bil non performing loans like subprime. In the end they just wrote it off.

Another example of well-intentions with unintended consequences....

http://singaporemanofleisure.blogspot.co...ended.html

Malaysia if managed properly, would be a wonderful country... lots of resources, low population, no natural disaster
Too bad the politicians choose to easy way out...

It's a long way to go for some proper reversal.

Populist policy, once taken is hard to recall back.

There is a prop play in Malaysia now - JB Iskandar is touted to be developed akin to Shenzhen (analogy of HK being Singapore). What do you guys think? Can JB match up to Shenzhen?

(18-11-2011, 05:53 PM)dzwm87 Wrote: It's a long way to go for some proper reversal.

Populist policy, once taken is hard to recall back.

There is a prop play in Malaysia now - JB Iskandar is touted to be developed akin to Shenzhen (analogy of HK being Singapore). What do you guys think? Can JB match up to Shenzhen?

I was quite skeptical about Iskandar first... because of poor historical records of their project management skill...

Recently, I tour around the area... the built up area is quite impressive. With Thomson medical and overseas university going in... i think it may do well...
The relationship between the countries have improved a lot... as you can notice that the buses on the road now have posters of Malaysian tourism...
Nowadays, the causeway is less congested also. because Singapore welcome more Malaysians to visit their IR (to donate $). so even lorry lane is open for cars!

If Singapore continue to grow, I guess JB may match Shenzhen... just like in USA, cities grow into metropolis?

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For property investment, its not so easy to make money. Because if you view JB from satellite view, there are still vast area of empty land. So developers can keep building, as long as there's demand.

Msia will remain the way it is for a long time to come.
There will be progress but at a leisure pace.

A couple of buildings here and there doesn't mean anything.
Public sector is not world class, law enforcement is lacking.
Legal framework/infrastructure/skilled workforce ... ...all lacking.

Getting basics right should be 1st priority. Everything have to come later.
1. Reliable Power supply 2. Good water quality/sanitation standards
3. Proper roads 4. Strong legal framework/law enforcement

Msia is not China, K.L is not Shanghai, Sgp is not HK, so JB will not be close to what shenzhen is.

Consolation...they caught mas selamat, something our boys in blue couldn't do.

Malaysia will forever be malaysia with their policies, but I know if singaporeans who are spending heavily on cars and other liabilities ..they simply spent and do not invest..

http://personalfinancemaster-guru.blogspot.com/