14/09/2026

MONDAY | SEPT 14, 2026

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Walking on financial tightrope o Even reasonably well-paid individuals may be forced to borrow or rely on credit when sudden expense of just RM1,000 arises, says economist debt commitments.” He pointed out that as a result, even when salaries increase, the amount of disposable income left at the end of the month may remain limited.

“If a household has to borrow or use credit to deal with a relatively small unexpected expense, it indicates that its financial buffer is thin.” Mohamad Idham also said households with limited disposable income could increasingly face a trade-off between meeting immediate needs and putting money aside for emergencies or retirement. “When current expenses become more urgent, emergency savings and retirement contributions may be postponed, potentially creating a cycle of financial vulnerability. “Without sufficient emergency savings, households may turn to credit when faced with an unexpected expense.” He said additional debt would then increase monthly commitments, leaving even less room for future savings and over time, this could also weaken retirement preparedness and increase dependence on family members or government assistance later in life. Mohamad Idham said the situation could become more serious if households with limited savings are hit by a larger financial shock, such as job loss, medical expenses or major household or vehicle repairs. “Such events can push families from having limited savings into significant debt.” He said policymakers should therefore focus not only on increasing household incomes but also on strengthening overall financial resilience. He added that this includes creating more high-quality and better-paying jobs, improving productivity and real wage growth, strengthening financial literacy and encouraging automatic emergency savings. He also called for efforts to ensure that essential costs such as housing, healthcare, transport and education remain manageable. “Social protection for gig workers and those with irregular incomes should also be strengthened. “Ultimately, the objective should not simply be to ensure that Malaysians can meet their expenses today but that they have a sufficient financial buffer to cope with tomorrow’s unexpected shocks.” “Higher salaries will definitely help,” he said, adding that any government able to provide greater financial support for unexpected expenses would have his strong support. “Whichever government can implement that will have my 100% vote.” Nik added that better financial literacy could help workers manage their money more effectively although this alone could not address the wider pressure created by rising living costs. Johan echoed Nik’s view that higher wages and lower living costs would give workers greater financial breathing room. “The cost of almost everything has gone up and it is much harder to stretch one’s salary today.” – BY KIRTINEE RAMESH

proportion of their income on food, housing, transport, healthcare or education may experience much greater cost pressures than what the headline inflation figure suggests.” Mohamad Idham said the RM1,000 threshold should not be interpreted as meaning that the entire Malaysian middle class is financially weak. He said some households could have relatively high incomes or assets but still lack sufficient liquid savings that could be accessed immediately during an emergency, while others might earn reasonable salaries but face high monthly commitments, including housing costs and debt repayments. “Therefore, the RM1,000 threshold is less about measuring wealth and more about measuring financial liquidity and resilience.

Mohamad Idham said the more important measure of whether Malaysians are becoming financially better off is not simply whether wages are rising but whether their real purchasing power is improving. He said a household could receive a higher salary but still feel financially stretched if the cost of essential goods and services increase at a similar or faster rate. He added that headline inflation figures might not fully reflect the financial pressure experienced by individual households because spending patterns vary significantly. “Families spending a large

Ű BY KIRTINEE RAMESH

of household financial resilience. He added that the issue should not be viewed simply as poor financial discipline or a failure to save, as rising costs and high monthly commitments are leaving many households with little disposable income to build an emergency buffer. “While many Malaysians may be earning more in nominal terms, much of that additional income can be taken up by essential expenses such as food, housing, transport, healthcare, education and

PETALING JAYA: A sudden RM1,000 expense could be enough to expose how financially fragile a household really is, with even reasonably well-paid Malaysians potentially forced to borrow or rely on credit when an unexpected payment arises, said Universiti Teknologi Mara Economics senior lecturer Dr Mohamad Idham Md Razak. He said the ability or inability to come up with RM1,000 for an emergency is an important indicator

Without adequate savings, an unexpected expenditure due to a car breakdown could force an individual to borrow money or rely on credit. – MASRY CHE ANI/THESUN

Living payday to payday common predicament PETALING JAYA: Stretching RM10 worth of petrol until the next payday, relying on leftover food or anxiously watching hard-earned savings “I wouldn’t say I feel financially secure,” she said, adding that a higher salary and lower living costs would give her more room to save.

just to survive.” He said food, petrol, tolls and vehicle maintenance left him with almost no savings, while unexpected expenses could quickly wipe out whatever remained. “You never know when you’ll suddenly have to fork out most of your savings or salary.” While acknowledging that rising costs are also driven by factors beyond the government’s control, Nik said higher salaries would give lower income workers more financial breathing room. “We can’t fully point fingers at the government. Geopolitical conflicts have also escalated the issue and placed a financial burden on petrol subsidies.” Nik said higher salaries are needed to keep pace with the rising cost of living.

He said he tries to save between RM100 and RM400 a month but unexpected expenses, including car repairs and maintenance, could quickly wipe out whatever he had managed to put aside. For 28-year-old marketing specialist Tasha, an unexpected RM1,000 bill would also likely mean borrowing money or using a credit card. “My current salary is just enough to cover my commitments and monthly expenses, including food and daily spending.” Tasha said she tries to save RM300 to RM500 a month but unexpected expenses often force her to dip into her savings. She said housing, loans, food and transport take up much of her income, leaving little room to build a financial buffer.

“Living in the city, sometimes you just have to learn to tolerate the higher prices because there isn’t much you can do about it. Like nasi lemak for RM7? Okay, I have to think it’s normal here.” For 26-year-old journalist Nik, the financial strain became real when his car broke down on a highway, resulting in a RM570 repair bill and another RM200 in towing charges. He added that the unexpected expense came on top of RM630 in rent, about RM60 in monthly phone bills and other family-related emergencies. “Living in Selangor and Kuala Lumpur, earning less than RM3,000 will often make you tighten your belt

disappear for an unexpected car repair is the predicament of many Malaysians today. For environmental consultant Johan Setiyo, 32, an emergency RM1,000 expense would likely mean reaching for his credit card or borrowing money. Johan said he does not consider himself financially secure as he struggles to save more than RM300 a month. “Almost 60% of my salary goes towards bills and other commitments. There have been times when I had only RM10 for petrol or had to rely on leftover food until payday. It feels like I’m constantly trying to make my money last until the next salary.”