The Muamalat Newsletter Vol. 2 2024

FEM eNewsletter | December 2024 86 (Baderol Sham, 2024). Collectively, these findings highlight the urgent need for enhanced financial literacy initiatives in Malaysia. The Influence of Materialism As materialism increasingly takes centre stage in today’s society, significantly amplified by social media, the importance of financial literacy cannot be overstated. In an age where curated lifestyles and consumerism are constantly showcased online, individuals, particularly the younger generation, are often driven to pursue these ideals, sometimes at the cost of their financial well-being. This environment fosters a culture of overspending, as young people feel pressured to acquire the latest gadgets, fashion trends, and experiences that they see their peers showcasing. The desire for social relevance and acceptance can lead to impulsive purchasing decisions that far exceed their financial means. The implications of this spending culture are significant. Many young people find themselves accumulating substantial debt in their efforts to keep pace with rapidly changing trends and societal expectations. Consequently, students often resort to additional borrowing, including personal loans, credit card debt, and other financial assistance, to cover everyday expenses during their university years. Moreover, societal pressures to maintain a certain image can lead to poor financial decision- making, as young individuals prioritize short-term gratification over long-term financial health. This ongoing cycle of debt and overspending can have lasting effects on financial habits, potentially leading toa lifetimeof instability and stress. It creates a precarious financial landscape that jeopardizes the stability of young adults even before they enter the workforce. Graduates burdened with debt often struggle to achieve financial independence and may find it difficult to save for future goals, such as homeownership or retirement. Without sufficient financial education and awareness, young adults may lack the skills needed to manage their finances effectively, underscoring the urgent need for targeted educational initiatives. The Rising Costs of Education Beyond lifestyle choices, education debt presents a significant burden. Education loans have become one of the primary sources of financial strain for young people, with their prevalence continuing to rise globally (Blake, 2024; Osborne, 2024). As students take out loans to finance their education, they often do so without a comprehensive understanding of the long-term financial implications of their borrowing. Education serves as a vital factor in transforming lives, especially for those from underprivileged backgrounds. However, the rising costs of education present a significant barrier, leading many students to rely on loans to finance their studies until graduation. This reliance results in mounting debt even before entering the workforce. Recent statistics reveal a critical issue regarding young adults’ debt in Malaysia, particularly for those under thirty, who bear a total debt burden of approximately RM1.9 billion (Agensi Kaunseling dan Pengurusan Kredit - AKPK, 2024). Education loans represent the second- largest category of debt among this demographic (Khazanah Research Institute, 2024). The staggering number of borrowers in default, 430,000 individuals with an outstanding RM6 billion in education loans according to the Perbadanan Tabung Pendidikan Tinggi Nasional (PTPTN) (Khairi, 2024), reflects the urgent need for effective financial education and support systems. These figures illustrate the current state of financial well-being amongMalaysian youth and emphasize the urgency of addressing systemic factors contributing to their debt accumulation. Without timely intervention, this situation threatens to undermine the financial stability and future prospects of a generation already grappling with substantial economic pressures. Recommendations for Enhancing Financial Education To address these pressing issues, it is essential to revamp the current curriculum, starting with primary and secondary education. Although financial education subjects are included in the curriculum, they often present concepts that are too advanced for children with limited capacity for critical thinking, particularly since they do not yet own income, assets, or debts. This disconnect makes it difficult for young children to visualize the relevance of what they are learning. Engaging them in hands- on activities is crucial. For instance, organizing field trips to banks where students can open accounts themselves would provide practical experience that reinforces theoretical knowledge. Incorporating real-world scenarios into lessons can enhance engagement and understanding. Schools can partner with financial institutions to provide workshops, simulations, and resources that make learning about finance more relatable and applicable. Age-appropriate activities, such as