KUALA LUMPUR: As World Savings Day celebrates its centennial, financial experts and academics are driving home the importance of savings and financial literacy, especially in education planning.
Financial literacy advocate Faiz Azmi, better known as 'Finance Faiz', echoed the importance of ingraining savings habits early.
"Most people fail to save in their old age because they aren't used to saving when they are young," he said.
Faiz highlighted the "50-30-20" budgeting rule — allocating 50 per cent of income for needs, 30 per cent for wants and 20 per cent for savings — as a practical guideline for building financial stability.
This method, he noted, is an effective way for young Malaysians to cultivate habits that will provide security later in life.
Faiz also addressed the social pressures of spending driven by "FOMO" (Fear of Missing Out) and "YOLO" (You Only Live Once) mindsets, encouraging Malaysians to make informed and independent financial choices.
Financial education, he said, is essential to help Malaysians manage their finances wisely and prevent unnecessary debt.
To celebrate this year's World Savings Day, the National Higher Education Fund Corporation (PTPTN) is holding Bulan Menabung Simpan SSPN (BMS) 2024, a programme in its seventh year aimed at elevating the practice of saving and promoting Simpan SSPN as the top savings product choice among Malaysians.
Faiz said the Simpan SSPN benefits, including income tax relief of up to RM8,000 annually, takaful coverage through Simpan SSPN Prime and Simpan SSPN Plus, and additional financial security for depositors.
"Education is an essential platform for everyone, but don't get trapped in self-financing for further studies," he advised, describing the Simpan SSPN as a structured, government-supported solution for long-term education financial planning.
Economics lecturer Lai Wei Sieng fully supports the PTPTN initiative, saying that without education savings, families may resort to loans, or even mortgaging assets to fund their children's studies, often finding these funds insufficient to meet the rising costs of higher education.
"Additionally, the loans obtained are often insufficient to cover the rising costs in the future," Lai said, cautioning that students who graduate with substantial education debt may face restricted career choices and prolonged financial obligations.
"With substantial education savings, children have greater options when choosing institutions locally or internationally," he said, adding that this freedom empowers students to pursue careers they are passionate about without financial limitations.
He lauded BMS 2024 as a valuable initiative to foster disciplined savings habits, noting that the various activities held throughout the month encourage parents to prioritise financial planning for education.
Summing up, Faiz and Lai highlighted the long-term benefits of financial education, which not only helps young people manage their income wisely, but also prepares them to avoid unnecessary debt.
"Financial education is crucial to reduce the risk of young people falling into debt," Lai said, advocating for structured education programmes as a means of empowering individuals and supporting mental wellbeing by avoiding financial stress.
World Savings Day was first introduced on Oct 31, 1924, at the International Savings Bank Congress in Milan, Italy, and aimed "to promote savings and encourage the habit of saving among people around the world," said PTPTN chairman Datuk Seri Norliza Abdul Rahim.
She called the day "a reminder of the importance of cultivating a savings culture", urging Malaysians to celebrate this occasion by focusing on family financial planning.
Norliza further highlighted that savings, especially for education, should be a priority for all Malaysian households, as it serves as a crucial tool for building a stable future for the next generation.
This year, BMS 2024 comes with a 'Fantasy' theme, encouraging parents to be "superheroes" in their children's lives by ensuring a strong financial foundation for education.
The campaign's tagline "Let's Be Your Child's Superhero" urges parents to secure a brighter future for their children through early and consistent saving.
Financial literacy programmes, Norliza said, provided parents with the tools to guide their children toward a financially secure future.
In her remarks, she highlighted the wide array of benefits available to Simpan SSPN depositors, including competitive dividends, matching grant of up to RM10,000 for one eligible family, government-backed security and syariah compliance.
"Malaysians are fortunate to have Simpan SSPN as a financial planning tool provided by the government," she said, adding that PTPTN also offers the myPTPTN app to streamline online services and encourage cashless transactions.
This development, Norliza said, reflects Malaysia's digitalisation agenda and aligns with efforts to enhance accessibility and convenience for Simpan SSPN users.
"BMS 2024 was developed to not only promote the habit of saving but also serve as a long-term financial planning tool," Norliza said.
"Every parent wants to see their children succeed," she said, encouraging parents to be "superheroes" by starting savings early, as education is a crucial asset that shapes future career opportunities and contributes to a nation's economic development.
"If we begin saving early, our savings will naturally grow over time," Norliza said, pointing out that the habit of saving from a young age can make education more affordable and help families avoid debt.
She encouraged Malaysians to observe Oct 31 as a yearly reminder of the importance of financial planning, adding that celebrating World Savings Day can have "a very positive long-term impact".