PETALING JAYA – A “live-in-the-moment” approach to life, combined with easy access to credit and buy-now-pay-later schemes, is pushing Malaysia’s young adults into substantial debt, according to financial experts. The latest report from the Credit Counselling and Debt Management Agency (AKPK) shows that 53,000 individuals under 30 are saddled with RM1.9 billion (S$577 million) in debt, with many young people borrowing for essentials.
Student loans make up around 60% of this debt, while credit card balances and personal loans contribute heavily, according to financial planner Amy Seok. Adding to the strain is the allure of quick financial gains through cryptocurrency and high-end purchases influenced by FOMO (Fear of Missing Out) and the YOLO (You Only Live Once) mentality, says Felix Neoh, director of Finwealth Management Sdn Bhd.
“There’s a trend among young adults to take on unnecessary debt, assuming they have time to pay it off,” Neoh noted, advising young people to focus instead on building their incomes and limiting credit card use. E-wallets, he suggested, should be reloaded only from bank funds, avoiding additional debt from credit card payments.
Ms. Seok, also the founding chairman of the Malaysia Literacy in Financial Education Association, emphasized the need for financial literacy, recommending that consumers set automatic payments to avoid late fees and allocate a portion of monthly income to debt repayment. “Regularly reassessing your budget can help in managing debts effectively,” she added.
Financial planner Gunaseelan Kannan highlighted that “lifestyle inflation” – the tendency to increase spending as income rises – is another factor pulling young people deeper into debt. Building relationships with financially savvy individuals can help youth maintain better financial discipline, he advised.
By curbing lifestyle inflation, reducing unnecessary expenditures, and paying off high-interest debts first, young Malaysians can gain control over their finances and create a path toward financial stability.