5 Common Millennials Purchasing Habits in MalaysiaGuest post by Mark De Jesus (Share your favourite tips with 56,000+ Malaysian students)
Inflation and the higher cost of living is a monster that we all have to deal with, regardless of age, race or income level. It affects the prices of goods and services as a whole, but the trick is knowing how to manage your own personal finances to ensure you maximise the value of every ringgit that you earn.
Millennials are facing a tricky situation right now whereby many are expecting a higher starting salary to cushion the higher cost of living, yet their spending habits don’t quite seem to work in their favour either. There is a famous saying by Robert Kiyosaki, “It’s not how much money you make, but how much money you keep and how hard it works for you”.
This is a way of life that many Millennials can gain from, put aside the figures and think about what you do with your money. Many of us are living in high levels of debt and well beyond our means.
Purchasing Habits among Malaysian Millennials
A recent Malaysian survey asked Millennials aged between 22-35 what they were spending their hard-earned income on. Though it is a small sample size of 10 respondents, the results are not surprising as it is a common trend across most research:
FoodThis is where the largest chunk of millennials hard-earned money goes to, in fact, it is as high as 40% of their monthly income. No surprise here, we love to eat and dining out has become a favourite pastime for many of us. The growth of the café culture and also hip joints started up by our very own Malaysians sees many of us willing to spend on food despite the increase in cost of living.
Loans and DebtsDid you know that over 22,500 bankruptcy cases in Malaysia as of September 2016, were individuals between the age of 25 – 34. This is worrying and highlights that many millennials are living beyond their means. Surprisingly, the number one cause of bankruptcy are the hire purchase loans, followed by personal loans, and then housing loans. Many also live off high-interest credit card debt that continues to swell and they find themselves spending most of their income towards debts.
Rent and UtilitiesPayment of their home rent and bills takes up a large portion of our income too.
Fun and Online ShoppingLate night outs, alcohol, binge drinking, partying, shopping, retail therapy. You name it. Millennials love to spend their money on instant gratification and excessive lifestyles, including the latest mobile phones and electronic gadgets.
PetrolPetrol consumption is a necessity and it’s no wonder it’s one of the top spending habits. Many of us prefer to own our own cars, so our daily commutes will definitely eat into our monthly income.
Let’s not forget that Malaysians are online shopaholics as recently reported by the Malaysia Digital Economy Corporation (MDEC) who shared that Malaysia has the highest penetration of online shoppers in the region, making us one of the fastest-growing online markets in the region. 7% of online shoppers make a purchase daily, 26% once a week, and 54% once a month. Although this is in totality, we’re pretty sure Millennials make up for a good size of this demographic, given that an average Millennial spends 3.8 hours of their day on their mobile phones. Their time is split between their social media accounts, watching videos, and online shopping.
These are the biggest expenses per month, and if you look at it, none of those listed above actually works for you. It doesn’t generate more income for you, it just causes your wallets to bleed. Savings and investments don’t even make it into the Top 5 and that’s alarming.
Young, educated and in debt
In fact, a study by the Asian Institute of Finance (AIF) revealed that Millennials in Malaysia are dealing with large financial stress so early in their lives, by being trapped by their high-level of debt and impulsive spending habits.
Many of us are living on money that we don’t even have yet, we live off our credit cards and there are approximately 38% of us taking personal loans to fund our lifestyles. 47% are living off high-interest-rate credit cards, that’s nearly half of the Millennial population in Malaysia. Only 28% of Gen Y claim to know how to manage their finances.
It’s clear that while Millennials have a healthy appetite for spending, it starts to border on unhealthy for their financial security when they start living in debt and living beyond their means.
Seeing this worrying trend, we suggest keeping on top of your finances with a budget, but also educating yourself by reading articles for more financial tips and advice on how to best manage your finances.
Written by Mark De Jesus. For more trusted financial advice and tips, visit www.CompareHero.my! Liked this post? Subscribe now to read more post like this one! Tweet