The YOLO lifestyle comes with a subtle warning – suffer later

FINANCIAL literacy education is worryingly low in Malaysia. This has led to many cases of youth bankruptcy and the current high withdrawal of i-Sinar.

To recap, about 84,805 Malaysians were declared bankrupt between 2015 and 2019, of which people below the age of 34 made up 26% of the bankruptcy cases based on figure provided by the Insolvency Department.

In another report, the Malaysian Financial Planning Council (MFPC) found that 22,663 Malaysians under the age of 35 were declared bankrupt between 2011 and September 2015.

In addition, some 64,632 Malaysians aged between 18 to 44 years old have been declared bankrupt from 2013 to 2018.

As a result of the lockdowns imposed and consequent downturn in business activities over the past one year due to the COVID-19 pandemic, the statistics could worsen.

Furthermore, Finance Minister Tengku Datuk Seri Zafrul Aziz revealed recently that 40% of millennials were spending beyond their means while 47% of Malaysian youths have high credit card debts.

Meanwhile, millennials today live with the motto of “YOLO” which means “you only live once”. With a salary range of between RM1,500 and RM4,000 for fresh graduates in Malaysia, it is difficult to keep up with the YOLO lifestyle.

In fact, it could even stall their career before it starts.

“Hence, peer pressure in lifestyle consumption will inevitably push the lower salaried group into debt as they try to keep up with their higher earning contemporaries,” Symphony Digest Sdn Bhd’s managing director Saw Ann Ping told Bernama.

“Living paycheque to paycheque will place the group in high risk of slipping into debt, plunging the spendthrifts into a situation that is difficult to get out of and made worse if they had resorted to credit cards to fund their lifestyle.”

“With the current youth unemployment and underemployment, youth bankruptcy would worsen,” she pointed out.

“This is potentially a time bomb for the country as this generation will be mired in financial woes and worse, need to be bailed out.”

The ex-banker warns that if the situation was left unchecked, there was potentially a future Malaysia of financially-dependent people requiring handouts to survive.

Thus, the financial services industry trainer stressed that financial literacy education is vital and that they should start young, whereby one or two periods on financial literacy can easily be incorporated into the secondary school syllabus.

Another option pointed out by Saw is to make financial literacy a compulsory session in universities before graduation. This will ensure that the youths are able to manage their budget prudently when they graduate with some leftover for their PTPTN (National Higher Education Fund Corporation) student loan repayment.

Additionally, financial literacy has a spill over effect on the nation’s drive to create more entrepreneurs. Businesses fail most of the time is due to the lack of financial discipline of entrepreneurs, inability to handle their cash flow well till the business becomes fruitful. – March 25, 2021


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