Based on a report by the Malaysian Financial Planning Council (MFPC) late last year, a total of 22,663 Malaysians under the age of 35 were declared bankrupt between 2011 and 2015. That’s a startling 11 people a day!

Now you may not be in such a dire state, but if you constantly find yourself being broke or having a hard time making ends meet, the sad reality is that you may need to do something about your financial situation right NOW, or face the same consequences.

No doubt, today’s high cost of living is a major concern not only among the millennials but also among the earlier generation, GenX. But take heed, there are ways to go about it and be in better control of your financial situation.

However, before we go into that and start asking how to better manage our money, perhaps it is wise to understand why we are currently in this state of dilemma.


Top reasons why Malaysians are broke:

1. Not having a proper budget

This really ought to be Money Management 101 that every Malaysian should learn in primary school. Not having a proper budget is the reason why people end up not knowing where their money goes to.

Budgeting your money means knowing how much is your income and planning for all your spending. Write down all the expenses that you will incur for the month and balance that with your income. This includes all your expenses such as rent, mortgage, insurance, utilities, subscriptions, food, petrol and toll.

After having done this, you’d be surprise to see that you really cannot afford that RM12 latte every day. Many tend to neglect this process in money management and end up running out of money before their next salary. So they turn to their credit cards instead to pay for their daily needs such as groceries and petrol.

Having a proper budget and strictly sticking to it ensures that you are constantly aware of how much you have left to spend and spending only on the necessities or what have been budgeted for.

DO: Monthly and daily budget.


2. Spending more than you earn

This is almost always the main reason why people are broke. Again, not having a proper budget, therefore not understanding how much you have to spend – is part of the reason. Another reason being not having any self-control!

We all wish to have that latest smartphone and fancy new handbag that all the cool celebrities are sporting. Many cannot afford them but they think they can simply because they can charge these items to their credit cards.

Here is a rule of thumb: If you cannot pay in cash, you cannot afford it.

Being able to afford something in cash means the cash that you have in excess of your monthly necessary expenditures. If you have to starve or default your utility or mortgage installment just to purchase that shiny new watch, YOU CANNOT AFFORD IT.

DO: Live below your means!


3. You have an expensive social life

Gone are the days where you can pay 5 ringgit for a plate of nasi ayam. These days you pay an average RM10 per meal. If you feel that this is already a burden on you, you probably cannot afford to binge on fancy cakes and smoothies at those hipster cafes every weekend. And you most definitely cannot afford to go for another round of happy hour with your colleagues every evening after work.

Think about it, do you really need to ingest these sugar-laden foods and drinks? Or down 2 pints of beer every evening just to distress after a long day? Or do you just want to have something new to post on your Instagram?

Some things just have to go. And maintaining an expensive social life you cannot afford should be at the top of that list.

DO: Practise self-control.


4. You lack financial goals

As children growing up, many of us were encouraged to have goals. Parents often tell their children to study hard to become doctors, lawyers and airline pilots. Sadly, not many parents tell their children that having solid financial goals are equally important.

So no wonder many of us are clueless when it comes to our own personal financial management. We live on a day-to-day basis, hoping that we have enough to last us until the next payday. No savings, no plans for retirement, no emergency funds, no insurance, no investment.

In fact, as reported by EPF Malaysia, over 50% of Malaysians have no financial assets. And 1 in every 3 Malaysians do not even have a savings account.

It is never too late to start planning for your future. Start saving, learn how to invest and have an emergency saving fund for rainy days. Medical insurance is extremely important so make sure you have that covered too!

DO: Start listing down your goals.


5. You are financially illiterate

If you are still reading, and have been able to relate to all the previous points, chances are you are financially illiterate.

No one expects you to memorize every word to Robert Kiyosaki’s Rich Dad Poor Dad. But if don’t even know how much expenses you incur on a monthly basis, or how much interest you are paying on your credit card late charges, you are in big trouble.

Being financially literate means having a sound understanding and skill to manage your personal finances efficiently. Aside from the ability to manage your daily spending and monthly expenditures, this also includes having the awareness to save and invest for the future.

DO: Start reading!


It is never too late to take control of your personal finances. If reading is not your thing, you can always seek the guidance of a professional financial advisor. Find a list of trusted advisors here. They are great at helping you plan for all of your short term and long term financial goals. Good luck!

Here’s another article you need to read! Find Out If You Are Saving Enough For Retirement