Build Sustainable Financial Ecosystem Through Financial Planning, Saving Practices

KUALA LUMPUR, Dec 24 (Bernama) -- The practice of saving as part of prudent financial planning not only ensures family well-being and the continuity of children’s education, but is also capable of building a sustainable financial ecosystem amid increasingly challenging living costs.

Senior Lecturer at the Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia (USIM), Dr Umi Hamidaton Mohd Soffian Lee said among the effective approaches included structured and systematic education savings such as the National Education Savings Scheme (Simpan SSPN).

She said the syariah-compliant savings scheme introduced by the National Higher Education Fund Corporation (PTPTN), provided a safe and secure medium for parents and guardians to plan their children’s education.

“Through this savings scheme, families can plan their finances in a more organised manner, prepare education funds for their children and build consistent saving habits.

“It also provides protection in the event of unexpected situations, such as job loss or emergencies, which could affect the continuity of education,” she told Bernama recently.

Umi Hamidaton said the effectiveness of the education savings scheme was evident through the income tax relief incentive of up to RM8,000 offered by the government.

“Simpan SSPN is fully guaranteed by the government without involving any additional risk to depositors,” she said.

According to her, Simpan SSPN, which comes with takaful protection, is highly beneficial, as it can reduce financial burdens should unforeseen circumstances occur, while supporting good long-term risk management.

“For me, Simpan SSPN is a gift as well as a way for parents to express love and a sense of responsibility towards their children. In fact, the tax relief offered is an added value to encourage participation in Simpan SSPN,” she said.

She opined that early savings through Simpan SSPN was crucial, especially for families planning to send their children to pursue studies locally or abroad.

According to Umi Hamidaton, with Simpan SSPN, reliance on government fiscal assistance can be reduced, while the potential for debt arising from high education costs can also be minimised.

“Parents are also urged to be more aware of the importance of practising saving from an early stage.

“Increases in tuition fees, the cost of teaching and learning materials, as well as rising living costs are expected to place significant financial pressure on future generations if careful planning is not undertaken,” she said.

She said the main objective of saving practices, particularly through Simpan SSPN, was to prevent children from bearing long-term debt after graduation due to education loans.

“The practice of saving by parents also serves as a good example to children in terms of financial management, while fostering high discipline and a sense of responsibility towards their future education,” she said.

-- BERNAMA