2017 has been an interesting year for personal finance and the economy overall. While not exhaustive, here are the important financial developments within the year, along with what lies ahead and tips to get your finances on track for 2018.
What changed in 2017?
Bankruptcy act amendments
The new law for bankruptcy in Malaysia officially came into force on 6th October 2017. There are 5 major changes that makes it harder for a person to be declared bankrupt. These are:
- Increase threshold
- Automatic discharge
- Avoid being a bankrupt with the voluntary arrangement
- Exemptions of social guarantors from Bankruptcy proceedings
- Bankruptcy notices need to be served personally
For more details, you may also read this article on What You Must Know About Bankruptcy in Malaysia.
Cryptocurreny not regulated in Malaysia, not a legal tender
Cryptocurrenncy is among the hot topics in 2017, and more specifically Bitcoins. However, Malaysians must take note that Bank Negara Malaysia (BNM) has released a statement that it will not regulate cyrptocurrency and that it is not legal tender in Malaysia. BNM has stated that it will not ban cryptocurrency and that a ban could curb innovation and creativity.
Nonetheless because cryptocurrencies are not recognised by Bank Negara, users of these digital currencies will not be covered under established disputed resolution arrangements in the event of any dispute or losses. Therefore Malaysians who do choose to dabble with it will be investing at their own risk.
“Digital currency businesses are not covered by prudential and market conduct standards, or arrangements that are applicable to financial institutions regulated by Bank Negara,”
Suraya Zainuddin from RinggitOhRinggit shared that,
“The cryptocurrency space is experiencing a bubble. We don’t know how big the bubble will be, or when it will pop, but as of time of writing (Dec 2017) sentiments are still very positive. It’s likely – but no guarantees – that the price increase will continue in 2018.”
To Malaysians who are thinking of investing in cryptocurrencies, Suraya’s top 3 pieces of advice are:
- Only invest what you can afford to lose
- You must have high level of digital security knowledge
- Do not invest in cryptocurrencies if you do not have low-risk investments in your portfolio
If you are interested in Bitcoin, our recommendation is to first arm yourself with adequate knowledge. Newbies to bitcoins can read Suraya’s Bitcoin FAQ.
Weekly petrol pricing
The price of petrol has always been a hot topic among Malaysians, and that is the case even more so this year when the government introduced the weekly petrol pricing. Malaysia used to have subsidies for petrol from the Malaysian government. On December 1 2014, Malaysia moved from a managed float system to a monthly petrol pricing. Then on March 29 2017, Malaysia moved back to a managed float system to allow consumers to enjoy a more stable retail price for fuel.
A weekly fuel pricing mechanism then came into effect in April this year where prices are determined every Wednesday with the new pricing taking effect every Thursday at 12:01 am.
E-hailing services legalized in Malaysia
Malaysians could finally breathe a sigh relief when ride sharing services was officially legalized in the country. Malaysia is also the first country to legalise e-hailing following the passing of the Land Public Transport (Amendment) Bill 2017 and the Commercial Vehicles Licencing Board Act (Amendment) Bill 2017 at the Dewan Rakyat on 27th July 2017.
The bills will enforce similar requirements for ride sharing drivers that have been imposed on taxi drivers. This will include health checks, scheduled vehicle inspection, insurance coverage as well as the issuing of driver cards. Ride hailing service operators will be given a grace period of one year to comply with the requirements before enforcement commences.
The law will also protect e-hailing drivers from being harassed and assaulted in the future. Aside from that, it will provide better safety for passengers as complaints on e-hailing services, whether it is regarding operators and drivers, can now be officially directed to Suruhanjaya Pengangkutan Awam Darat (SPAD) and the Commercial Vehicle Licensing Board (CLVB).
What to lookout for in 2018
The most searched term in Malaysia in 2017 according to Google was BR1M. For 2018 RM6.8 billion have been allocated to benefit the current 7 million BR1M recipients who will continue to receive aid The amount of BR1M handout in 2018 remains the same as the previous handout and is as below:
- Category 1
Single individuals earning less than RM2,000: RM450 single payout in February
- Category 2
Households with income between RM3,001 – RM4,000: RM900 total payout
- Category 3
Households with income below RM3,000: RM1,200 total payout
If you or your family members are eligible for BR1M make sure you register or update your information here before 31st December 2017.
Various government aids
Budget 2018 announced various aids which Malaysians should take advantage of. Among the aids are:
- Children born between 1st Jan 2018 – 2022 will be given RM200 to start their initial savings through Amanah Saham unit.
- Malaysians only need to pay RM10 for haemodialysis treatments at government hospitals.
- RM100 schooling aid per pupil for school students from low-income families
- RM250 Book Voucher Assistance for students at IPT and in Form Six
Malaysia Moving Towards Cashless Society
Bank Negara Malaysia have stated that among the reason why Malaysia is moving towards becoming a cashless society is for greater economic efficiency. This is because the cost of handling physical cash is said to be inefficient and expensive. It has been reported that handling physical cash costs roughly RM1.8mil a year.
While the aim is to be a cashless society by 2050, various digital payment services have already started in Malaysia. Stay ahead of the pack and make sure you don’t get left behind, you may read this article on 9 Digital Payments in Malaysia That You Need To Know About.
What Malaysians Should Do To Prepare for 2018
CompareHero.my interviewed Siti Rahayu, Chief Operating Officer of Federation of Malaysians Consumers Associations (FOMCA) to get tips for Malaysians to prepare for the following year.
FOMCA advises Malaysians to increase their financial knowledge in preparation for 2018 and to prepare prudent financial plan. This is because consumers will be faced with increasing consumer issues because of reduction of subsidies and the rising cost of living.
Financial tips from FOMCA:
Create a detailed financial plan and follow it.
- Avoid delays for monthly repayments because interest and late payment charges can cause your debt to snowball.
- Always make audits on energy used at home. Calculate energy usage at home to gauge electricity usage, especially homes with a number of air conditioners.
- Have a “dreamboard” where you can place your 2018 financial goals. For example, “to have RM20,000 savings by the end of the year” or “Pay off debts within 6 months”
- Compare prices of goods and consider going for generic products.
- Get the most out of your daily spending and necessities such as when grocery shopping and pumping petrol. One way to do so is by using a good cashback credit card when doing so. You may compare and apply for the best cashback credit card in Malaysia for FREE!
Ultimately, the cost of living will continue to increase because of inflation. However, if we prepare ourselves with prudent financial planning we can weather the financial storms if it hits. As for what Malaysians can do on their part, it also comes down to a matter of prioritising needs over wants. We hope the tips above will help Malaysians prepare better for the new year.
This article first appeared on CompareHero.my’s The Definitive Malaysian Personal Finance Roundup of 2017. For more ways to save money and a complete overview of comparisons for credit cards, personal loans and broadband plans, visit CompareHero.my today!