I've been surprised several times over the past couple of years when talking to some of my friends and learning about their financial predicaments. Said friends are those of my age, some even older, around 28 to 34 years old, and it just amazes me whenever they tell that they have no money. I mean, at this age, where most people are getting married and starting a family, these friends of mine who are unmarried and some of whom are still living with their parents, have absolutely zero savings and are living from hand to mouth every single month. I know at least 5 friends in such a predicament, and these are the people who are close enough to me that they would tell me about their financial situation. And since I am not really that close to a lot of people, the fact that 5 of my small handful of pretty close friends is in some sort of financial predicament makes me wonder just how many people my age are having financial issues as well. According to a recent survey, Malaysia ranks as the worst credit card repayers in the Asia-Pacific region, which gives me a further idea of how bad people are in this country.
People usually complain about how cost of living in Malaysia is becoming ridiculously high but salaries have not increased for the past couple of decades. To some extent, this is definitely part of the problem (which would hopefully be gradually resolved if the current government was replaced by one that was less corrupt and didn't constantly siphon off the people's money on useless mega-projects or buying handbags for a certain suspected murderer's wife. So for those who can vote, you know who NOT to vote for). The average degree holder usually starts off with a salary of about RM2000 a month. Assuming a person lives a moderate lifestyle, rents a room in KL and drives an average car, rent and monthly car repayment is at least about RM1200 a month, food at least RM400 a month, petrol RM200, groceries another RM200.... that already all your salary gone, with none left to spend on leisure. For people who can't get jobs with a better salary than this, I can kinda understand why lack of money is a problem. Although I find it strange that a salary can remain at that level of a miserable RM2000 a month after more than 5 years of working.
HOWEVER, most of my friends are staying with their parents and driving cars given by their parents (usually really old cars). So they are already saving on rent and car repayment, and if the parents cook and buy some of the groceries, this helps as well. I should know, because I'm one of them and I saved a lot over the years. But yet such friends STILL don't have any money. I'm not sure why, but I believe for some of them, it's also largely a matter of not spending money wisely, living beyond their means. And here's why I say this.
Case #1:
The most 'shocking' story I recently heard from a friend was when he said he spent RM400 to buy some movie-related paraphernalia which is a big interest to this friend of mine, and apparently this resulted in him having a grand total of RM10 left for food for the rest of the month (which was about a week). So I asked him what he was going to do for food, and he said go hungry until dinner time, at which time he can get dinner at home. I asked him why he spend all his money on something that isn't useful, when he know he doesn't have enough money to eat, and he simply said those items were on discount at the time. I asked him how he was going to pay for his car petrol, and he said by credit card. I was just blinking at him and kinda speechless at that point.
Case #2:
This was not really friend but an ex-colleague is no longer working at my office. Said guy is driving a Lancer. You would think anyone who bough a Lancer would make sure he would have enough money to pay off the Lancer. But one find day, he asks me through the office email if I can lend him about two grand. The story was that he was behind on his car loan for two months and the bank was threatening to take back his car the following week if he did not pay. And he recently withdrew some money to pay for his car loan, but while walking his dog near the area of the ATM, he got jumped and the money was stolen.
The first question is, why was he so brilliant to withdraw a large sum of money and then go walk your dog nearby? For me, I try to time my ATM withdrawals at such a time when I'm about to go home, so I can leave some of the cash at home to be used to top up my wallet I need to, and every day I try not to carry anything more than RM300 in my wallet, unless I know I have to pay for something more expensive. It's safer than withdrawing than walking around a whole day which means you are at risk of losing that large sum by someone stealing it or maybe you misplaced your wallet, etc.
The second question is, why buy such a expensive car when you obviously cannot afford it? Sure people may think you look cool in it, but trust me, all that coolness really evaporates into thin air when you have to ask people for 2000 bucks to help prevent your car from being empounded. Especially from a person like me who drives a freaking Myvi! Just so you know, I didn't lend him the money, but some people in my office did. And the repayment was late.
For some people, it's not so much living beyond their means, but more towards making bad career choices. A couple of people I know took a risk and quit regular day jobs to do sales job which allows them more freedom and flexible working hours, which is what they want, but they pay is based on commissions. I'm not against taking risks and quitting your job to live out your dream. However, some risks don't pay off and in such cases, you need to realize quickly when your risk is not working out and go back to working a 9 to 5 job, which may means no flexibility, but you are more financially secure and you get company benefits like healthcare, travel costs are paid for, etc (unless you work for a really shitty company). For both friends, the risk did NOT pay off, they ended up struggling every month. Both of them asked to borrow money from me to the tune of about RM1000-1500. Fortunately, one did pay me in full in due time and was smart enough to go back to working full time although he's not happy with it.
However, the other friend is still sticking to his 'dream job' and promised to pay me back within a couple of weeks because he was waiting for a paycheck. That paycheck apparently never came, because it's been probably 2 months now and I still have not gotten back that money. My advice to him to get a secure job has fallen on deaf ears.
I do believe in the adage that if I ever lend money, it should be an amount that I don't need urgently to survive, and in this case, I can do without it. However, the fact that I have to ask my friend for payback and he's constantly having excuses on why he can't pay back (some of which I can verify to be true, which makes it even sadder, maybe) does result in a strain in the friendship.
And to be perfectly honest, I don't see the difference in having flexible hours compared to a normal day job. In such flexi-jobs, the amount you earn is based on how much work you put into it. If you're doing sales, you need to go out and make sales. And so you probably spend about the same time on such a job as you would need on a normal 9 to 5 job, in order to get the same amount of money, unless you do some sort of multi-level marketing thing, most of which are just scams to help the founders make big bucks (plus, those guys can be like a cult, almost worshipping whatever product they are selling and it's SCARY. I've been some of these talks, I felt like I was in an overly enthusiastic church, and the god was the product). So you end up working an equivalent amount of hours, BUT because sometimes you don't work the same hours as normal people, you end not being able to hang out with people because you have to work weekends or night time to meet clients. And the annoying side effect of this is trying to work out times to meet up. Like one friend of mine working of these 'flexi-jobs' asked me and a few other friends out on a working night to go hangout at a place where it's cheaper after 11pm onwards. The thing is, I and these other friends all work normal jobs, and therefore it does not make sense to ask friends who work normal hours to go out past 11pm on a working night to hang out with you, and also to save on a few bucks, which the rest of us don't mind paying for to go during more normal hours.
A friend of mine who is a financial advisor once said that it Financial Management should be made a subject in school, and seeing the way things are, I think things is really true. I cannot understand how people at my age and with similar level of education can go through each month with NO money. It's really really scary. If you're a friend of mine reading this and this applies to you, well, I'm sorry if I sound judgmental, and maybe you're in a situation for reasons not due to overspending but you really can't get a better paying job, in which case it's understandable. But seriously, if you can, at least make a habit to put aside a couple of hundred bucks a month or something. Start a different bank account just for savings and don't touch the money that goes in there. Better than nothing!
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