“For a new year to bring you something new, make a move, like a butterfly tearing its cocoon! Make a move!”, said Mehmet Murat Ilda.

We look forward to transform our own cocoons – moving our living, career or health toward a livelier direction in a new year. Unfortunately, 2014 appears to be a bleak and tough year for Malaysians. The cost of living in Malaysia is on the rise as prices of various goods and services continue to spiral while government subsidies go down.

An average household income of RM5,000 in Malaysia used to sustain a family of two adults and two children quite comfortably. Today it is barely sufficient. This scenario is more bleak for the lower income group despite the different 1Malaysia People’s Aid offered by the government.

The rising prices have led to the steepest inflation rate that Malaysia has seen to date, peaking at 2.9% last November. Dr. Chua Hak Bin, Asean economist at the Singapore-based Bank of America Merrill Lynch, forecasts that Malaysia’s inflation could rise to 3.6% this year due to the rising costs and impending Goods and Services Tax implementation in 2015. With the living costs and incomes growing in opposite directions there are a number of considerations to stay alive:

• Is it necessary to dine out? If you have a big family, home-cooked meal may be more cost-effective, as well as being healthier. It makes more sense to dine out if there are only few family members due to the cost of buying ingredients in small quantity.
• Do I need that, really? Make a conscious effort. The next time you are about to pay for something, ask yourself, “Do I really need this?” Review your list of essentials to see if there are acceptable alternatives that will not burst your budget. Think before you swipe that plastic.
• Have I done a financial plan? Whether budgeting daily, monthly or long-term, be disciplined in your financial management. It may initially be distressing to look at your bank account frequently, seeing more output than input; however, it is the first step to being aware of your spending patterns and managing your finances. Should you face financial problems, don’t suffer in silence; the Credit Counselling and Debt Management Agency (AKPK) can be one of your supporting avenues. Remember, building long-term financial stability requires short term pain.

With inflation rates going nowhere but up and Malaysian families struggling to make financial ends meet – what are our decent survival options? Stay and protest, or seek greener pastures elsewhere? When the going gets tough, the tough gets going. Start by making changes in your life:

• Plan ahead – anticipate major expenses you plan to incur
• Be disciplined in your spending – one marshmallow today or two tomorrow?
• Have a contingency plan – invest in basic medical insurances that cover you in that rainy day

References: Inflation data retrieved in December 2013.