Exploring the changes in household expenses on individual financial distress in Malaysia: a qualitative study

In recent decades, Malaysia has witnessed significant economic growth and development. However, this progress has been accompanied by rising living costs, particularly in urban centres, placing increasing pressure on household budgets. This thesis investigates the impact of rising household expenses on the financial distress experienced by individuals and families residing in urban areas of Malaysia. Using in-depth interviews, the research explores the challenges and coping strategies of both urban and rural residents dealing with financial strain. It highlights the different ways individuals and families manage these challenges, and the potential consequences of their strategies. The study finds that rising household expenses greatly impact financial distress, with low-income urban families being the most affected. Middle-income households use budgeting strategies to cope, while upper-income groups face fewer disruptions. Financial distress extends beyond just material hardship, contributing to psychological stress and strained social relationships. Common coping mechanisms include growing food, cutting discretionary spending, and relying on community support. The findings stress the need for targeted policies like subsidies and financial education to help vulnerable groups manage financial distress and build resilience.