Financial Planning: Failing To Plan Is Planning To Fail
There is an age old saying which goes, failing to plan is planning to fail, and this can be seen in the way Malaysians handle their finances. According to the 2017 Prudential Relationship Index (PRI) 1, 74% Malaysians who financially plan together are more likely to think their finances will improve in the next five years.
The PRI study has also shown that 55% Malaysians who do not financially plan with their partners are less likely to think that their finances will improve. Partners who financially plan together show more financial optimism in their 5-year financial plan.
The numbers also show that Malaysians are relatively unlikely to share financial responsibilities compared to the rest of Asia, with as low as only 32% pulling their finances together, the second lowest in nine countries.
A staggering 17% of Malaysians don’t pool their resources together, which could imply that they may have trust issues towards finances.
Pooling together resources has been linked to good relationships, as statistics show that partners that pool their finances have better relationship satisfaction (72/100) compared to those who keep their finances separate (52/100).
However, although Malaysians do not always pull their finances together, 53% admit to sharing their financial matters with their partners, with another 39% telling each other most things. This shows that many Malaysians are still able to separate financial issues from personal ones.
The good that has come of this is that 57% of Malaysians think that working with a financial planner improves their relationships. This is true especially for people who are not great with money, as preparing a 5-year plan will help them go a long way.
When it comes to financial planning, these are some thoughts on Malaysians’ minds: -
- 76% say that planning their finances together will improve their family relationships.
- 74% say that planning their finances together will improve their personal finances in 5 years.
- 57% say that working with a financial agent to plan their finances makes their relationships better.
- 43% say that they consult with a financial services professional to manage their finances.
- 39% say that if something happened to them their families would suffer financially.
- 10% say that if something happened to them their families would be in serious trouble.
When it all boils down to it, sharing is caring. Couples and families should be able to openly talk about finances to ensure that there is financial security in their old age. Families also create a better trust bond between members with more honesty.
If you want to ensure your financial future is secure, seek out a financial planner. Careful planning will be able to shield you from a rainy day.
1 The 2017 Prudential Relationship Index (PRI) involved interviews with 4,600 respondents in Asia, in Cambodia, China, Hong Kong, Indonesia, the Philippines, Singapore, Thailand, Vietnam and Malaysia, who shared insights into their relationships with partners, parents, children, friends and relatives. In Malaysia, 516 respondents between 25 and 55 years of age living in Kuala Lumpur or Petaling Jaya with a monthly household income of at least RM4,000, representing approximately the top two-thirds of household incomes in the survey cities.