PETALING JAYA: Improving financial education among youths is key to tackling rising debt and bankruptcy risks, experts say.
While the National Strategy for Financial Literacy 2026–2030 (NS2.0), is a step in the right direction, the experts felt that greater emphasis on practical education and sustained engagement is needed to help young Malaysians make better financial decisions.
Financial Planning Association of Malaysia president Alvin Tan Chin Cherng said Malaysia has already made measurable progress in improving financial literacy.
He noted that the Malaysia Financial Literacy and Capability Index improved from 57.1/100 in 2018 to 59.1/100 in 2024.
“NS2.0 represents a significant step forward because it goes beyond knowledge and addresses financial behaviour and attitudes as well,” he said.
However, Tan pointed out that financial resilience among Malaysians remains a concern.
“Six out of 10 Malaysians still struggle to set aside even RM1,000 for emergencies, while only 37% can sustain themselves for more than three months if they lose their income,” he said, adding that about 26% feel they are carrying excessive debt.
Tan said financial education has already been integrated into Malaysia’s school curriculum from preschool to upper secondary level, but translating knowledge into real financial behaviour remains a challenge.
“Studies show that 77% of students demonstrate high financial knowledge and 64% show positive financial attitudes, but only 17.6% demonstrate strong financial behaviour,” he said.
Meanwhile, Universiti Teknologi Mara academic Dr Mohamad Idham Md Razak said young Malaysians today face a more complex financial environment due to easy access to digital payments, credit facilities and online consumption.
“A structured national strategy that integrates financial education across schools, universities and digital platforms can help build early awareness about budgeting, saving and responsible borrowing,” he said.
However, he noted that many young people begin their careers with limited financial planning skills.
“Some rely on personal loans and credit facilities to support lifestyle spending, while others underestimate the long-term impact of debt commitments,” he said.
Idham said financial literacy programmes should focus on practical applications rather than purely awareness campaigns.
“Young people respond better to interactive tools such as financial planning apps, simulations and case-based learning that reflect everyday financial decisions,” he said.
Federation of Malaysian Consumers Associations chief executive officer Dr T Saravanan said the strategy is a timely initiative to strengthen financial literacy among Malaysians.
However, he said its effectiveness would depend on adequate funding, sustained implementation and strong coordination among government agencies, financial institutions and consumer groups.
“The growing number of youth bankruptcies reflects deeper financial behaviour issues, including heavy reliance on credit facilities such as personal loans, hire-purchase loans and credit cards,” he said.
He added that Buy Now Pay Later (BNPL) services are increasingly contributing to debt among young consumers.
“These services may appear convenient and interest-free, but they can encourage overspending and lead to multiple repayment commitments that become difficult to manage,” he said.
Saravanan stressed that financial education should emphasise practical skills such as budgeting, responsible borrowing and building emergency savings.
He also cautioned against relying solely on digital campaigns to measure the success of financial literacy efforts.
“High online engagement does not necessarily translate into better financial behaviour. What is needed is sustained engagement and practical programmes that help Malaysians apply financial knowledge in their daily lives,” he said.
