Is financial empowerment among Malaysians the key to a better economy?

In September this year, Prime Minister Datuk Seri Ismail Yaakob presented the 12th Malaysia Plan (12MP) with a purpose to introduce fundamental reforms to strengthen the development and sustainability of the country.

With Malaysia on track towards a 6% GDP growth in 2022, businesses and communities are hopeful that the government’s new initiatives will boost economic recovery from Covid-19. In addition to this, as individuals, we must ask ourselves how we can play a more active part to further improve the country’s economy.

Financial empowerment should be prioritised as a key focus among Malaysians in order to ensure the safe resumption of economic activities and a prevention of a more protracted economic downturn.

Financial empowerment is a new approach to poverty reduction that focuses on improving the financial wellbeing of people by helping them acquire and practice the financial skills and behaviours that tangibly improve their financial outcomes and build up their financial security. A key component in achieving financial empowerment is the ease of access to financial information, education and counseling.

Being financially literate means having the knowledge and confidence to manage, save and invest money for ourselves and our family efficiently and effectively. This can include everything from getting out of debt, monthly budgeting, tax preparation and retirement planning.

A recent survey by RinggitPlus indicated that 70% of Malaysians believe their EPF savings alone are not sufficient for retirement. 45% of respondents in the same survey, however, have still not started any retirement planning.

In order to improve the financial empowerment of Malaysians within a short-time span, individuals need affordable access to high quality, neutral, and relevant financial information, education and counselling services. Digital solutions which provide financial planning services are one of the methods that can help to expand financial empowerment among Malaysians because it is convenient, affordable and easily accessible through a smart device with an internet connection.

Digital financial planning is a step-by-step approach which guides users to take control of expenses, investments and income, and provides a convenient way for them to monitor and manage money and improve both their financial and mental wellbeing.

One digital financial planner that is available online is a free financial health tool created by RinggitPlus in partnership with kipleX. The tool, curated with the expertise of licensed financial planners enables users to input their personal information such as their monthly income, monthly expenses and what age they want to retire to get an overview of their financial health and expert recommendations to help them improve their financial health.

Although risks remain from the ongoing crisis, achieving economic recovery will require Malaysians to improve their knowledge base regardless of their current level of financial empowerment. The key is to keep striving to learn as knowledge is power towards developing more confident financial decisions.

This article was written and prepared by Sharwin Luke Selvarajoo. If you would like to see more of these articles or would even like to suggest some topics we could talk about, please share them with us at https://www.kiplex.com/.