Cakna Duit campaign to encourage financial literacy among Malaysians | New Straits Times (2024)

FAQs

What is the financial literacy issue in Malaysia? ›

Nazri said: "The level of financial literacy among Malaysians is still low. The study found that 69 per cent prefer spending over saving, leading to a lack of savings for emergencies. Moreover, 47 per cent admitted to having difficulty setting aside RM1,000 for emergencies."

Only 57% of adults in the United States are financially literate.

Financial literacy helps people in becoming independent and self-sufficient. It empowers you with basic knowledge of investment options, financial markets, capital budgeting, etc. Understanding your money mitigates the danger of facing a fraud-like situation.

This indicates that developed countries only sometimes have a very high financial literacy index. For the Southeast Asian region, Indonesia has a financial literacy index of 32%, Malaysia at 36%, Myanmar at 52%, and Singapore at 59%.

One of the most significant events in the history of the Malaysian economy was the Asian financial crisis, which caused Malaysia's GDP to shrink from US$100.8 billion in 1996 to US$72.2 billion in 1998. The Malaysian economy's GDP did not recover to 1996 levels until 2003. The year 1997 saw drastic changes in Malaysia.

Higher debt and bankruptcy rates for people with limited financial knowledge who are more likely to make poor borrowing decisions. Again, higher bankruptcy rates and loan defaults can not only affect individuals but have negative effects on the financial system.

Denmark, Sweden and Norway top the financial literacy rankings. Over 70% of adults in each of these countries are considered financially literate. A common thread among each of these nations is a focus on financial education.

Lack of financial literacy cost 15% of adults at least $10,000 in 2022. Here's how the rest fared. The share of people who said not being financially literate cost them more than $10,000 is up from 11% in 2021, according to a new report.

A new study found that just 57% of adults are financially literate, with over 40% being unfamiliar with high-yield savings accounts and other saving methods.

In conclusion, financial literacy has both its advantages and disadvantages. On the one hand, being financially literate can help individuals make more informed decisions with their money and avoid debt. On the other hand, financial literacy can also lead to people becoming more materialistic and obsessed with money.

How does financial literacy help you? ›

A strong foundation of financial literacy can help support various life goals, such as saving for education or retirement, using debt responsibly, and running a business. Key aspects of financial literacy include knowing how to create a budget, plan for retirement, manage debt, and track personal spending.

Exactly, Financial literacy is a valuable skill that enables individuals to navigate the complexities of the modern economy, make informed decisions, and contribute to their own financial well-being as well as the overall economic stability.

The US ranks 14th in financial literacy.

The number 1 country in the world for financial literacy is actually Denmark, where approximately 71% of all adult citizens are considered financially literate.

In Malaysia, reading habits rate is still at a lower level, Malaysian on average read only two books per year. About 80% of Malaysian university students are reluctant readers. They can read but choose not to read.

In fact, approximately 47% of those between 18-35 years old are struggling financially and are living beyond their means, and 60 Malaysians are being declared bankrupt every day (Malaysian Digest, 2014). High household debt can weaken private consump- tion spending particularly during an economic down- turn.

Literacy Rate in Malaysia (2010-2021, %)

The literacy rate reached 95.71% in 2021. Between 2010 to 2021, the literacy rate of Malaysia decreased by 2.74%. On a year-on-year basis, the literacy rate decreased by 0.40% in 2021.