Why Even Malaysia’s T20 Feel Poor Today — Understanding Inflation, Lifestyle Costs & Smart Wealth Strategies
- Mr Money TV
- Oct 7
- 4 min read
How can Malaysians earning RM8,000 today feel poorer than their parents, who earned RM2,000 twenty years ago?
It’s not about bad spending habits. Many are budgeting, saving, and investing, but somehow still feel the squeeze. Why? Official salaries have risen 7.9% since 2020, yet household costs like food, housing, childcare, and insurance have surged 25% to 40%.
In this article, we’ll break down exactly how much purchasing power Malaysians have lost and reveal practical strategies for T20 and M40 earners to regain financial control. If you’re earning RM6,000 or RM10,000 and still feel broke, it might not be your fault—but understanding the system and learning how to play it is your responsibility.
1. The Wage vs Reality Gap
Bank Negara reports salaries grew 7.9% since 2020. That’s a good thing, right? Not really.
Official CPI inflation rose 9.8% in the same period.
Real-life essentials are even worse:
Category | Actual Increase |
Food & dining out | +40% |
Housing | +35% |
Childcare | +30% |
Healthcare & insurance | +15% |
Transport | +30% |
Think of your salary as a bucket of water. If your expenses grow faster than your inflow, the bucket empties faster, no matter how much you pour in.
Example: If you earned RM5,000 in 2020, a 7.9% raise brings you to RM5,395 in 2024. Meanwhile, your lifestyle now costs RM5,440, RM945 less purchasing power per month.
2. Inflation - The Daily Squeeze
Everyday life paints the same picture:
Food: Nasi lemak rose from RM3.44 to RM3.72. Annual inflation on dining out exceeds 4%, turning a RM60 family dinner into over RM100.
School tech: Families now spend between RM2,000 to RM4,000 yearly on laptops and iPads just to stay current.
Transport: A Perodua Kancil cost RM25,000 in the 2000s. An Axia today? Up to RM50,000.
Housing: Damansara homes that once cost between RM250,000 to RM400,000 now cost between RM1.5 mil to RM2 mil. Add renovations, furnishings, and mortgage pressures, and the numbers are staggering.
Every extra RM500 on essentials is RM500 you can’t invest or save. Compounded over years, that’s tens of thousands in lost opportunity.
3. The Sandwich Generation Trap
Many 30-to-40-somethings support both ageing parents and young children.
Healthcare: Parental medical costs rise 10% to 15% yearly. Plans that were once RM300 per month now cost upwards of RM600.
Childcare: Between RM1,200 to RM2,500 per child per month, with bigger families paying more.
Education: Private school fees can go up to RM50,000 per year. Even public schools still add fees, activities, and enrichment classes.
Even M40 families often fall into a gap: too rich for subsidies, not wealthy enough for private services.
The sandwich generation feels pressure from both ends, faced with accelerating lifestyle inflation and limited savings.
4. Why the B40/M40/T20 Labels Are Broken
Household income classifications can also be misleading:
A single person earning RM5,000 is in B40.
But two people in the same household earning RM5,000 each makes it a T20 household.
Add three kids and the reality diverges even more.
Khazanah Research Institute highlights that dependents, location, and disposable income are ignored. Two RM12,000 families can have entirely different financial stress.
Using these brackets as benchmarks is like judging runners in different weather solely by their speed. Context matters.
5. Breaking Free from Our Parents’ Playbook
Sorry, but the old financial playbook doesn’t work anymore.
Home Ownership Trap
Houses that once cost RM150,000 are between RM1.5 mil to RM2 mil now. Spending 60% to 70% of your income on mortgages can kill long-term wealth.
Lost opportunity cost: An RM5,000 per month mortgage might block investments from growing by 8% to 10% annually. Renting and investing might yield higher net wealth.
“Best for Kids” Trap
Overspending on schools, enrichment, and gadgets teaches kids two hidden lessons: stress and poor money habits.
Instead, why not show them financial discipline and develop their problem-solving skills?
Redefining Success
Flashy car or luxury home no longer mean success today.
Focus on financial freedom, options, and long-term wealth:
Live aggressively below your means.
Measure success by freedom, not appearances.
Teach kids financial responsibility over indulgence.
6. The New Investment Reality
Old strategies like fixed deposits no longer protect purchasing power. Expenses rise 20% to 40% faster than official inflation, so 6% portfolio returns may be negative in real terms.
Some smart alternative approaches available today include:
Stocks: Look for sectors that can pass on inflation, like tech or healthcare.
Cryptocurrency: Keep a small amount for growth & hedging.
International Exposure: Getting into USD or SGD assets can protect you against any ringgit weakness.
Remember that bucket example earlier? Smart investing requires both inflow (investments) and leak control (spending discipline).
7. Practical Next Steps
Here are some steps you can take to help you better protect and grow your wealth.
Short-term: Track expenses, question “must-have” costs, and open investment accounts.
Mid-term: Automate investing, research stocks or exchange-traded funds (ETFs), and align family spending priorities to make sure everyone is on the same page.
Long-term: Redefine your lifestyle for wealth creation, involve kids in money decisions to teach them financial discipline, and aim for a portfolio generating about 30% of income.
Conclusion
The old rules, like obsessing over owning a home, overspending for kids, and keeping up appearances, all of this can keep you feeling broke. Understanding inflation, real costs, and active wealth-building strategies empowers you to regain control.
Financial freedom is achievable, but you need to understand the system, plan smartly, and make informed choices.
If you prefer this in video form, check it out here on our YouTube channel!
Disclaimer
This is not investment advice. All content is for education and entertainment purposes only. Consult a financial adviser before making investment decisions.
