Search by : Pn. Nor Anidah Rosli (Assistant Accountant) 

Author : Prof Madya Dr Azwan Abdullah,
Felo Institut Penyelidikan dan Pengurusan Kemiskinan (InsPeK) Universiti Malaysia Kelantan (UMK)

Source : www.bharian.com.my

 

The COVID-19 pandemic situation sparked a new phenomenon in the country's economic landscape. Department of Statistics 2020 statistics show an increase in the use of e-commerce platforms among households by 23.3 percent in 2019, compared to 11.3 percent in 2016.

The percentage increase in household spending has an impact on overall economic activity, either to meet the needs or to comply with the desires of the needs alone.

Therefore, a holistic financial assessment should be carried out by households to ensure that expenditure is done prudently at all times.

It requires households to be literate about cash flow management. In this regard, the ability of households to administer and manage their sources of income is a major challenge that needs to be understood.

 

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Knowledge of the total sources of net income, debt liabilities as well as other financial commitments is a mandatory agenda all times and need to pay attention.

This should not be underestimated as it has major implications for the household's net cash flow value position and is even a benchmark for financial health to manage spending prudently so as not to get caught up in debt.

Statistics from the Department of Insolvency Malaysia based on the reasons for bankruptcy 2014 to 2018 show that debt due to personal loans recorded the highest figure with 26,399 cases. Hire purchase loans for vehicles and housing recorded 23,521 and 13,400 cases respectively. Statistics on non-performing loans based on The Highlights and Monthly Statistics in February were released by Bank Negara Malaysia (BNM) for the consumer goods purchase category of RM2 million, compared to RM1.5 million in the same month of 2020.

Therefore, strict self-discipline is necessary in managing household finances more systematically and prudently to ensure financial sustainability. Measuring financial capabilities before spending is a smart way to avoid financial deficit and debt problems among families and communities.

To strengthen the financial stronghold of households in Malaysia, the government through the allocation of Budget 2021 seeks to support the country's economic sustainability with three core goals, namely People's Wellbeing, Business Continuity and Economic Resilience. In managing government spending prudently in the holistic recovery of the country's economy, the government took cautious measures. So carefully the government continues the agenda of economic empowerment of the country. Therefore, to realize a sustainable economic agenda, the government introduced the 6R Strategy Plan taking into account the elements of Resolve, Resilient, Restart, Recovery, Revitalise and Reform.

Various efforts to strengthen the economy were also drafted by the government. Among them was the Strategic Programme on Empowering the People and Economy (PEMERKASA) launched by the Prime Minister on 17 March which outlined 20 initiatives to strengthen the economy.

In conclusion, prudent financial management can strengthen the economy of the family and the country as well as support the government's agenda in achieving the goals of the Shared Prosperity Vision (WKB) 2030.

Indeed, prudent spending behaviour in managing finances has a significant impact on the government's desire to boost key economic growth activities (KEGA).

In other words, the effort to revive the country's economy at its best requires the coupling of all parties, from households to state affairs.

Date of Input: 30/05/2022 | Updated: 31/05/2022 | nurmiera