FOR the past 24 years, at least 200 young individuals — the majority under the age of 34 — have faced bankruptcy annually.
According to data provided by the Insolvency Department, a total of 5,272 young individuals were declared bankrupt during this time frame.
Youth and Sports Minister Hannah Yeoh recently informed the Dewan Negara that out of 5,272 youths declared bankrupt, 5,189 were between 25 and 34 years old, while 83 were under 25.
Personal loans have been identified as the leading contributing factor. In 2024 alone, she said out of the 15,413 bankruptcy cases — nearly half of the total — were linked to personal loans. The troubling trend reflects not just individual financial mismanagement but also a systemic failure to equip young Malaysians with essential financial skills.
Housing loans ranked second, followed by other forms of debt, including vehicle hire-purchase loans, corporate guarantees, income tax debt, credit card debt, failure to contribute to the Employees Provident Fund (EPF), scholarship and student loans, and social guarantees.
This trend is alarming and should serve as a wake-up call for all concerned, particularly the youth. Immediate and affirmative preventive measures must be taken to address the issue.
Yeoh said her ministry, through the National Youth and Sports Department, had taken the initiative to organise a special nationwide youth financial literacy programme, which aims to enhance the group’s financial resilience, from April to October this year.
However, all these efforts seem insufficient to resolve the issue effectively. Looking closely, it is evident that a lack of financial education from an early age is a major root cause among young Malaysians. It is no exaggeration to say that many enter adulthood with minimal understanding of money management, let alone budgeting and responsible debt handling. Drawn to a lavish lifestyle and the ease of access to credit, many ultimately find themselves trapped in financial distress.
Given the seriousness of the problem, it is crucial to introduce financial literacy as early as the primary school level. Just as children learn math and science, they should also be taught the fundamentals of managing money. Equipping them with financial knowledge early on will help instil responsible spending habits, smart saving practices, and an understanding of debt management, preparing them for a financially secure future.
It is learnt that in many developed countries, such as Singapore and Australia, financial education is embedded in school curriculums, ensuring that young people grow up with a solid understanding of savings, investment, and responsible spending. Perhaps, the Malaysian government, particularly the Education Ministry, should take similar steps to integrate financial management into our national education system.
Of course, financial literacy should be introduced in stages, appropriate to different age groups. For example, at the primary school level, children should learn basic money concepts — such as differentiating between needs and wants,
understanding the value of saving, and practising delayed gratification. Simple tools like piggy banks and classroom activities on budgeting can help children develop a healthy relationship with money.
In secondary school, lessons should evolve to include practical budgeting skills, awareness of credit card risks, and the basics of managing loans. Students should be introduced to real-life scenarios where they must plan their expenses based on a fixed income, teaching them to prioritise needs over wants. Financial literacy should be as important as other life skills, preparing students for real-world financial responsibilities.
For university and college students, the focus should shift to financial planning for adulthood, including debt management, investment, and retirement savings. With many young adults accumulating student or personal loans early in their careers, understanding how interest rates and repayment terms work is crucial to preventing financial disasters.
Most importantly, as the popular Malay adage says, education starts at home. While schools play a vital role, financial education should begin at home as well. Parents must lead by example, showing responsible financial habits — whether it’s saving for the future, managing credit wisely, or discussing money matters openly.
Maybe our Education Ministry should also take an active role in this by getting the schools to make financial education a compulsory subject, ensuring that students graduate with the knowledge to manage their finances effectively. Collaborations between educational institutions and financial experts can provide students with real-world exposure through workshops, case studies, and interactive financial simulations.
Banks and financial institutions, on the other hand, should take the initiative to provide free financial literacy programmes targeted at young people. Programmes that teach banking basics, credit management, and long-term financial planning can go a long way in shaping financially responsible citizens.
Ideally, the Ministry of Education must recognise financial literacy as a critical life skill and incorporate it into the national curriculum. Instead of waiting until adulthood to teach financial responsibility, we must start early — instilling sound financial habits in the minds of our young before they enter the workforce.
Parents, too, must take responsibility for educating their children about money. Simple actions like teaching children to save a portion of their pocket money, explaining household budgeting, and involving them in financial decisions can build a strong foundation for financial responsibility.
Of course, ultimately, the honour falls upon our young Malaysians to take charge of their financial future. By learning the basics of personal finance early, they can make informed decisions, avoid unnecessary debt, and build a secure financial future.
The rising bankruptcy cases among our youth should not be seen as isolated incidents. Instead, they highlight a broader systemic issue—one that can be tackled through proper education and awareness. After all, financial literacy is not a luxury but a necessity. The sooner we integrate it into our education system, the better our future generations will be able to navigate life’s financial challenges.
The views expressed here are those of the writer and do not necessarily represent the views of the Sarawak Tribune.
