The Muamalat Newsletter Vol. 2 2024

FEM eNewsletter | December 2024 85 Introduction In today’s fast-paced world, where financial considerations are integral to nearly every aspect of life, achieving financial security and effectively planning for the future has become increasingly essential. Individuals are tasked with juggling multiple financial goals, such as saving for vacations, funding education, preparing for retirement, and building wealth. Successfully navigating these goals requires at least a foundational level of financial literacy. Despite decades of discussions and initiatives from various stakeholders, efforts to improve financial literacy have yielded minimal results, continuing to hinder progress toward financial well-being for the population. Current State of Financial Literacy Malaysia is experiencing a similar trend, prompting concerns from the Finance Minister II regarding the persistently low levels of financial literacy among its citizens (Varatharaja, 2024). Recent studies conducted by various research agencies reveal a troubling lack of financial literacy. The Federation of Investment Managers Malaysia (FIIM) (2021) found that 80% of non-investors lack knowledge about unit trust schemes, and over 90% are unfamiliar with private retirement schemes. The Youth Capital Market Survey by the Securities Commission Malaysia (SC) (2022) indicates that many young individuals feel uncertain about investment decisions and lack awareness of fundamental financial concepts. A substantial portion of their income, ranging from 60% to 75%, is allocated to daily expenses, leaving only 5% to 10% for savings and investments, reflecting low financial stability. The Ringgit Plus Malaysian Financial Literacy Survey 2023 (RinggitPlus, 2023) further reports that 51% of Malaysian adults have yet to engage in investing, and half of Generation Z spends all or more than their monthly earnings. Additionally, a report from the Financial Industry Collective Outreach (FICO) (2023) reveals that 71.7% of individuals aged 16 to 19 exhibit inadequate saving and spending behaviours, with 4.2% showing no positive financial habits at all. These trends underscore the challenges faced in achieving financial preparedness in adulthood. Data from the Financial Education Network’s (FEN) survey indicate that 84% of Malaysians do not maintain fixed monthly savings, while 69% prefer spending over saving, ultimately leaving them unprepared for emergencies Author: Wan Rasyidah Wan Nawang Faculty of Economics and Muamalat Universiti Sains Islam Malaysia Educating for Tomorrow: EmpoweringYoungMalaysianswith Financial Savvy