MALAYSIA is not the only country facing increased food and energy costs. In fact, our inflation rate at 3.4 per cent is lower compared with Thailand (7.7 per cent) and Indonesia (4.4 per cent).
Having less makes it much harder. At least 8.4 per cent (it was 5.6 per cent in 2019) of Malaysian households, a family of four that earned RM2,208 a month in 2020, are facing hardship.
Although government aid went to the affected people, lockdowns challenged many families' financial buffers. The economic fallout highlighted the need to improve our personal financial management skills.
A recent study shows that only four out of 10 Malaysians understand good personal finance practice. Others lack the awareness and confidence to pursue a disciplined, personal budget.
Furthermore, personal financial planning requires one key discipline: to be able to discern between one's needs and wants, which is about living within your means.
To help Malaysians tackle financial anxiety, the Employees Provident Fund and the Social Wellbeing Research Centre launched the Belanjawanku app for 2021/2022.
It provides price references and integrates real-life spending habits, helping users minimise budgeting errors and keep afloat even in recessions.
The app was created to promote prudent spending and allow people to enjoy a dignified way of living.
It helps individuals and households to assess financial capabilities before making big purchases that lead to long-term financial commitments.
Considering the importance of financial buffers in times of emergencies, Belanjawanku includes ad-hoc expenses and recommended savings as part of the 11-item baskets.
The app consists of budgets for nine types of households, ranging from an individual to married couple.
It serves as a reference for individuals and households as they move through different cycles in life.
Using Belanjawanku, they can gauge the difference in expenses due to changes in their lives that include, for example, buying a car, getting married, having children or moving to another place.
The app details 11 items that households typically spend on.
These include food, housing, transportation, utilities, personal care, healthcare, childcare, discretionary expenses, social participation, ad hoc or one-off expenses as well as savings for future needs.
The app also allows users to compare expenses against the recommended budget.
It comes with tips for better personal financial management.
Essentially, it guides users in making financial decisions.
The app is available in Bahasa Malaysia and English and can be downloaded for free from Apple App Store and Google Play Store.
Malaysians must start taking steps to improve financial literacy.
The pandemic should be a wake-up call for us to reorganise our financial behaviour.
It is hard to anticipate when the next financial crisis will hit.
Poor money management and erratic spending habits, especially by young families and professionals, will aggravate an already critical situation.
So it is imperative that you arm yourselves with financial management and capabilities.
The writer is director, Social Wellbeing Research Centre (Employees Provident Fund-endowed centre), Universiti Malaya; president, Malaysian Economic Association and fellow, Academy of Sciences Malaysia