The real cost of living on RM5900



The real cost of living on RM5900
By Zan Azlee

So some survey was done to find out what the average monthly income of Malaysian households are and it seems it like it’s good news. The figure has risen from RM5000 in 2012 to RM5900 in 2014.

Official surveys are meant to be credible. They follow a system that is supposed to follow a correct sampling system that will lead to a realistic extrapolation.

But ask what the average person is exposed to around him or her regarding their monthly household income and cost of living and you will probably hear something different.

The average household income may be the average household income. But does it mean that we can lead a good quality of life with that income? We most definitely need to consider the costs as well.

Fine. Let’s take that new average monthly income of Malaysian households of RM5900 and try and calculate how an average family would live in an average major town.

  1. Income tax and EPF
    Let’s say the total deduction for both comes to roughly 30% of the monthly salary. That would mean a RM1770 deduction. So now they’re left with RM4130.
  2. Home rental/installment
    Let’s say the home costs about RM300,000 and the rent or loan installment equals to about RM1,300 a month. The balance becomes RM2830.
  3. Car installment
    A car is almost a necessity in Malaysia. And a small locally-made one could set you back another RM400 a month. Now what is left is RM2430.
  4. Food and groceries
    An average family of 4 would probably spend about RM600 a month on a little bit of quality meats and vegetables (and not to mention other household items). So now it’s RM1830.
  5. Utilities
    Electricity, water, telephone, etc, all can add up to quite a lot too. So let’s just lump that all into a cool estimate of RM600 a month. RM1230 is what’s left.
  6. Children
    Kids go to school and incur lots of other costs like daycare, etc. No one will stinge on their children’s basic necessities. Maybe around RM600 goes to this and there’s RM630 in the bank.
  7. Savings
    Some allocation has to go towards building up a nest egg or even for a rainy day. RM300 a month isn’t much, but it’s better than nothing. That leaves only RM330.

With only RM330 left in the bank every month, what else is there for an average family to do? Sure, you can survive, but what kind of existence would it be?

And this is only taking into consideration the  family that earns the latest average monthly household income in Malaysia. How about those earning less?

Of course, my calculations aren’t following any set standard guidelines of an official survey. So I can’t really claim that what I’m writing is really that credible.

It’s all just based on my own experience, and mostly from anecdotal data I obtain from many of my colleagues, friends and family members. Hardly scientific, I know.

But if you consider yourself average and mix around with average people, try and talk to them and see what they say. I’d be willing to bet that last RM330 that it would be something similar.

[This article originally appeared at KopitiamEkonomi.Com]

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