Cost of Living for Malaysian Families

Cost of Living vs Lifestyle

Ask around and you’ll find a lot of people saying that the cost of living has skyrocketed. Prod further, and you’ll find that they start complaining about the rising costs of air tickets, branded items, restaurant meals, and so on.

While I do not deny that the cost of living has gone up, let’s just clarify that there is indeed a difference between the cost of living and the cost of lifestyle.

The cost of living of a particular place is calculated by adding up how much is needed to pay for things like housing, food, electricity, clothing, healthcare and other everyday items.

The cost of lifestyle, is everything else, like your iPhone, Netflix subscription, Birkin bag, Nikes, trips to Japan for spring, or dining out at an Italian restaurant.

Apparently many Malaysians don’t

Standard of Living Bubble

Taken from Investopedia,

The concept of consumers living beyond their means for an extended period of time. The notion of a standard of living bubble is characterized by flat inflation-adjusted earnings for members of the workforce over several years, during which the use of consumer credit and spending increases in order to provide the illusion of increases in standard of living.

In other words, this involves using your credit card and paying the bare minimum each month, for that 80 inch TV, swanky iPhone X, and new Gucci bag – especially when you’re only earning RM5000 per month. You think you’re all that, and in fact, you do look it, but this is what it means to live beyond your means, and there’s a nice big bubble around you just waiting to pop!

Ballin’ [Source: Brotips]
On August 21, 2017, the New Straits Times reported that 3.6 million cardholders have a combined outstanding balance of RM 36.9 billion on their credit cards. Out of those, more than half either paid just the bare minimum of 5% of their debt, or not at all. Before 2018, the interest rate on credit cards could have reached 35% per annum. That’s like… higher than an Ah Long’s!

Cost of Living in Urban Malaysia

Now that we’ve gotten that out of the way, let’s talk about the cost of living in Malaysia.

It has been reported that for a family of 4, you can expect to pay about RM 6000 a month if you live in an urban setting in Malaysia.

“House rental or housing loan installment would be RM1,200, car loan for a Perodua MyVi or a Proton would come up to RM500 monthly, food per head would be RM400 (RM1,600 in total), petrol (RM250).

“The electricity and water bills, internet connection, two cellphones, sewerage bill and high rise maintenance bill would all come up to RM1,000,” he said.

Wong added that the two children’s transport to and from school, the wife’s public transport, the family car’s toll would add up to another RM500 monthly.

“The family will also need RM200 monthly for medical purposes and RM100 per person for insurance. Assuming they take two holidays, with each holiday costing RM2,000, they would spend RM4,000 a year which comes to about RM340 a month,” he told FMT, adding that RM500 is also set aside as savings.

And here are estimates from Bank Negara, which calculates living expenses as RM6500 for a family of 4. In spite of average (mean) household income being listed as above living wage estimates, one third of households in Kuala Lumpur were earning below the living wage.

The cost of living has been steadily rising for Malaysians, and more and more struggle to make ends meet each month. This has been attributed to the following reasons:

  • Food is more expensive (It’s a global thing)
  • Slow wage growth (6% doesn’t cut it)
  • Inflation
  • GST? (probably)

While the cost of living in Malaysia is significantly lower than it’s neighbouring country Singapore, its inhabitants are plagued by a high inflation rate.

How do we balance our wages and living expenses? The rising cost of living coupled with negative wage growth (after taking the inflation rate into account) has left many Malaysians grumbling about the state of economy in the country, with 80% of Malaysians saying that the nation is in a recession.

Malaysia – A Retirement Haven Nonetheless

The cost of living might be high for Malaysians, but it’s one of the most attractive places to retire for foreigners.

Malaysia has recently listed as one of the top places to retire, due to its attractive currency exchange rate, reasonably high level of English, and MM2H program – IF you can take the climate, that is.

Too expensive for Malaysians, a retirement haven for expats. [Source: World’s Best Places to Retire in 2018]

Our Expenses

Here’s a rough estimation of how much we spend living in Penang. We are a family of 4 (a couple with 2 young kids).

Monthly expenses:

  • Rent (3 storey terrace house, came with furniture, gated and guarded, with facilities in Tanjung Bungah) : RM2800
  • Utilities (internet, electricity, water) : RM530 (Note that we have 2 air-conditioners switched on at night, and we subscribe to TIME Broadband, and are on prepaid mobile and data plans)
  • Daycare (for 1 child, 3 hours in the morning) : RM600
  • Groceries (supermarkets, wet markets) : RM1200
    • Alcohol in Malaysia is heavily taxed. A 6 pack of beer costs around RM35, whereas a bottle of wine can cost from RM50 upwards (RM100 for a decent one, according to husband).
    • From time to time we spend a lot of cheese. We like getting our cheese from an Italian restaurant in town. Prices are about RM14 per 100 gms.
  • Eating out : RM500
  • Petrol : RM160 (Note that we don’t drive much since my husband works from home, and I am a home-maker. My daughter’s daycare is a 10 minute walk from our house)
  • Cleaner : RM280 (RM70 weekly, 4 hour session)

Other than that,

  • Car (Ford Fiesta, second hand, fully paid for) : RM40000
  • Car Insurance and Road Tax: RM1200 annually
  • Medical : Approx RM40 per visit to a GP, and at least RM120 at a pediatrician
  • Trips here and there. One annual trip back to France this year will cost about RM10,000 in air tickets alone. We also fly back to Kota Kinabalu once a year (about RM1,200 for tickets), and probably make another trip to a regional holiday destination like Vietnam, Thailand, HK.
  • We also drive down to KL from time to time. The toll charges from Penang to KL come up to about RM55 and we probably make use of a full tank of petrol (RM80).

I’d say we are very comfortable and lucky. We have what we need – and more than that.

We have no debt, mainly because we haven’t set out our minds on buying a piece of property as yet. We also paid cash for our car, and don’t believe in credit cards.


To end this piece, I’d thought perhaps it would be wise to ask ourselves these questions:

Are we living beyond our means?

What can we do to earn more money to support our families?

What unnecessary trimmings can we cut from our daily lives?

Leave a Reply

Your email address will not be published. Required fields are marked *