Cant afford long-stay in SG - is Malaysia a good option?

I like Malaysia and, as you say, hotels can be very cheap.
By the way, don't stick to KL, wander around the country.

I don't know about Sing passport holders but you can get a 3 month VOA but another if you wander into South Thailand or Sing for a day trip.
Keep hotel receipts to prove you aren't working.
If immigration bother asking, and they might after two or three VOAs, you can show receipts from all over Malaysia and that'll probably be enough to keep them happy, also photo of you in front of the hotels or local landmarks kept on your phone would also be handy... just on the off chance of an issue.
Coach travel is cheap and hotels are even cheaper outside KL.
Have a great time.

You are right about the price difference between Singapore (which costs as much as European cities of similar size) and Malaysia (which has a third world level of costs and services).
However, you didn't mention why you don't just stay with your GF in Singapore - which would be the most sensible (and cheapest) option.
Contrary to Fred, I would not recommend visa runs or extensions above the initially issued VOA for Malaysia (and DEFINITELY not for Singapore). The average visitor stays 3.5 days in Singapore and 5.8 days in Malaysia - anything substantially longer than that (without very good justification) might raise suspicions that will bite you later.

beppi wrote:

The average visitor stays 3.5 days in Singapore and 5.8 days in Malaysia - anything substantially longer than that (without very good justification) might raise suspicions that will bite you later.

I stayed there for 2 months a shot without the slightest issue or so much as a question from a copper, hotel, immigration or anyone.
The third trip saw me being asked how long I intended to stay at the immigration counter and the "2 months" reply with a quick explanation and very vague 'will visit blah, blah, blah' just got them wishing me a good holiday.
Saying that, I looked a lot like a backpacker and nothing like someone intending to work.

You are a white guy and as such very unlikely to work illegally for a starving wage.
Asian-looking visitors will not be entertained so lightly!

beppi wrote:

You are a white guy and as such very unlikely to work illegally for a starving wage.
Asian-looking visitors will not be entertained so lightly!

That is likely to be true, sad, but still true.