Modelling Financial Preparedness of Low-Income Households Towards Social and Economic Well Being

Nur Sofea Syafiqah Zunaedi () and Nurul Syifaa Mohd Shakil ()
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Nur Sofea Syafiqah Zunaedi: Universiti Teknologi Mara
Nurul Syifaa Mohd Shakil: Universiti Teknologi Mara Cawangan Selangor Kampus Puncak Alam Bandar Puncak Alam

A chapter in Proceedings of the 12th International Conference on Business, Accounting, Finance and Economics (BAFE 2024), 2025, pp 285-293 from Springer

Abstract: Abstract Financial preparedness refers to managing the cost of living to sustain standard of living and act as an aid during downtime. To achieve financial preparedness, the process of planning and controlling the expenditure needs to be systematic to balance with income earning. In Malaysia more than 50% of households do not meet proper financial preparedness. Low-income earners or B40 is the crucial individual that need to have their financial preparedness as their backup during retirement and emergencies. The ability to manage finances will lead to better life and prevent fall into poverty. B40 groups are encouraged to prepare their own finances instead of relaying on government assistance solely because government assistance might be late and possibly once in a blue moon. Every household, especially the B40 group needs to prepare their finances at least 6 months ahead as their protection. However, B40 groups are unable to afford and prepare for it. They are not ready for outbreak shock or economic downturn. Low-income households are struggling with their survivability in daily necessity and basic needs but at the same time they are not preparing financially for the future. Every household, especially those in the B40 group, needs to be financially prepared in order to afford their daily expenses, particularly for health, retirement and emergencies. The life-cycle model and permanent income hypothesis have similar predictions that stated consumptions can affect a household’s income. Thus, the purpose of this study is to examine relationship financial preparedness among B40 population households in Selangor.

Keywords: Financial Preparedness; B40 households; Low-income; Literacy and Retirement (search for similar items in EconPapers)
Date: 2025
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DOI: 10.2991/978-94-6463-666-6_17

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