Abstract

Savings is the balance out of income but is not spent on current consumption. Because we cannot anticipate what would take place in the future, we should set aside some money for unexpected events or emergencies. Without savings, unexpected events can become large financial burdens. Therefore, savings helps an individual or family become financially secure. Due to limited savings and with such low income levels, we are mostly depending on debts to finance our consumption. Currently, Malaysia household debt is amongst the highest in Asia, at 86% of GDP. There are many factors influencing savings rate in Malaysia. The paper aims to measure the economic variables that may significantly influence toward savings rate in the country.

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