Narrative review: Cost-of-living pressures, financial well-being, and coping strategies among Malaysia's B40 households
DOI:
https://doi.org/10.55573/IJAFB.117005Keywords:
B40 households, coping strategies, cost of living, financial resilience, financial well-beingAbstract
A narrative review of studies on the cost of living, financial well-being, and ways in which low-income households including the B40 group in Malaysia cope was undertaken. The cost of living for households with limited financial resources increases as prices of essential goods and services increase. The share of essential goods and services in total household expenditure is high for low-income households. Thus, to study the financial well-being of low-income households, in addition to their income, consideration must also be given to their essential expenditure, their savings, their debt, their financial capability, their ways of coping, and the institutional support that they receive. The review was conducted using a structured narrative-review approach. The literature search was conducted using databases such as Scopus, Web of Science, and Google Scholar as well as by means of supplementary reference searching and preliminary evidence exploration. The search terms used were cost of living, financial well-being, financial stress, coping, B40 households, low-income households, and Malaysia. The literature reviewed showed that the cost of living affected low-income households in several ways including reduced purchasing power, inflexible expenditure on essentials, financial stress, exposure to debt, and various forms of material hardship. In order to cope with these effects, low-income households employed financial as well as non-financial means of coping. The financial means of coping included budgeting, drawing down on savings, borrowing, reducing expenditure, generating additional income, selling assets, and receiving support from social networks. While some of these means of coping helped the household to alleviate short-term financial pressure, they created greater vulnerability in the long term. Much of the Malaysian research on the financial well-being of low-income households has focused on the behavioural determinants and on the financial capability of households. However, the structural cost of living, changes over time, and within-subgroup differences are not well-integrated into current research. Thus, sustainable financial resilience on the part of households in Malaysia is explained poorly by current research. B40 financial well-being is a dynamic outcome that is determined by the interaction between the cost of living that faces households, the resources of the household, the financial capability of the household, the ways in which the household copes, and the social protection that is available.
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