Debt and the management of personal finances
| dc.contributor.advisor | Smit, A. v. A. | |
| dc.contributor.author | Kotze, Liezel | |
| dc.date.accessioned | 2017-11-03T08:44:31Z | |
| dc.date.available | 2017-11-03T08:44:31Z | |
| dc.date.issued | 2006 | en_ZA |
| dc.description | Dissertation (M.Com.(Business Management))--University of the Free State, 2006 | en_ZA |
| dc.description.abstract | Afrikaans: Hoë persoonlike skuldvlakke en lae spaarverhoudings blyk die norm te wees en nie die uitsondering nie in die meeste ontwikkelde lande en Suid-Afrika is beslis nie uitgesluit van hierdie groeiende verskynsel nie. Na die deregulering van finansiële instansies gedurende die 1980’s, het persoonlike skuldvlakke wesenlik gegroei en spaarvlakke het aansienlik gedaal tot ‘n breukdeel van wat nodig is vir gesonde persoonlike finansies, aangesien hierdie twee veranderlikes in ‘n omgekeerde verhouding tot mekaar staan. Uitermatige skuld en lae besparings beïnvloed nie net die individu nie, maar ook die werkgewer en die ekonomie. As gevolg van oormatige skuld kan individue die gevolge van afbrekende finansiële mislukkings ervaar, soos gebroke huise of egskeiding, stres, gebrek aan prestasie by die werk, agteruitgang van finansiële gesondheid en bankrotskap. Al hierdie uitkomste van uitermatige skuld en lae spaarvlakke, kan ‘n individu se lewenskwaliteit benadeel. Die persoonlike aspekte van ‘n individu se lewe sal ook sy werk negatief beïnvloed en daarom ook sy werkgewer. Lae produktiwiteit, afwesigheid, organisatoriese verbintenis en werktyd wat in beslag geneem word, het ‘n negatiewe invloed op die werkgewer en ook die ekonomie. Eerstens beïnvloed dit die ekonomie indirek deur die verlaagde produktiwiteit van werknemers. Tweedens beïnvloed dit die ekonomie direk deur veranderlikes soos belegging, inflasie, rentekoerse, die waarde van die rand en die oorkoepelende ekonomie te beïnvloed. ‘n Tekort aan basiese finansiële bestuurskennis is een van die belangrikste redes waarom individue verkeerde finansiële keuses maak. Geslag, ouderdom, inkomste en die vlak van opvoeding kan alles ‘n uitwerking hê op finansiële geletterdheid en dit het ook ‘n invloed op die persoonlike finansies van die spesifieke individu. Hierdie studie se doel was om inligting in te samel aangaande die bestuur van skuldgebruike van alle geregistreerde studente aan die Universiteit van die Vrystaat Skool van Bestuur wat geregistreer was vir bestuursprogamme gedurende 2005. Die sekondêre doelwitte sluit ook in om die belangrikheid van finansiële geletterdheid en die effektiewe bestuur van persoonlike finansies te bepaal, verskillende bronne van skuld te identifiseer, asook om die persentasie van besteebare inkomste wat aan elke bron van skuld bestee word vas te stel, die omvang van skuld bymekaargemaak deur die respondente, die omvang van besparings deur die respondente, asook om die impak van uitermatige skuld op produktiwiteit in die werkplek te bepaal. Die teikenpopulasie was 425 geregistreerde studente gedurende 2005. Daar is besluit om van die hele populasie gebruik te maak en hierdie besluit het die gebruik van ‘n verteenwoordigende proef uitgeskakel. Die vraelyste is deur 286 studente voltooi. Die resultate het aan die lig gebring dat die totale gemiddelde persentasie wat elke maand aan skuld bestee word, gelykstaande is aan 62,1%. Dit beteken in algemene terme dat 62,1% van alle beskikbare besteebare inkomste vir die betaling van skuld gebruik word, wat slegs 37,9% van besteebare inkomste vir algemene maandelikse uitgawes en besparing laat oorbly. Volgens 2006- statistieke is die huidige Suid-Afrikaanse huishoudelike skuld 73% van die besteebare inkomste, met slegs 28% van die salaris wat nie aan skuld bestee word nie. Hoë vlakke van ontevredenheid is by die respondente waargeneem aangaande hulle kennis en waarneembare beheer van hul persoonlike finansies; die mate van selfversekerheid om hul finansies te bestuur en beleggingsbesluite te neem; hulle was bekommerd oor skuld, besparings en of hulle oor genoegsame aftredingsfondse beskik; hulle was ook pessimisties oor hul finansiële toekoms en het hoë vlakke van finansiële stres ervaar wat inbreuk maak op daaglikse verantwoordelikhede. Daar was ook hoë vlakke van slegte finansiële bestuur deur nie fondse opsy te sit vir besparings of aftrede nie, nie ‘n begroting te volg nie en nie kredietkaarte ten volle te betaal om finansiële kostes te vermy nie. Die respondente sal ‘n gemiddeld van 5-6 maande kan oorleef deur net van hul spaargeld gebruik te maak indien hulle nie kan werk nie. Die mees algemene rede wat die respondente aangevoer het waarom hul nie spaar nie, is dat hulle nie genoeg geld het om te spaar nie (74,3%), terwyl 13,2% aangedui het dat hulle nog nie aan spaar gedink het nie. Individue wat nie in beheer van hul persoonlike finansies voel nie, dink dat hulle nie genoeg geld sal hê om te oorleef tydens hul aftrede nie; hulle voel negatief oor hul toekoms, ervaar ongelooflike finansiële stres en volg nie ‘n weeklikse of maandelikse begroting nie. | af |
| dc.description.abstract | English: High personal debt levels, as well as low savings ratios, seems to be the norm rather than the exception in most developed countries and South Africa is definitely not excluded from this growing phenomenon. After the deregulation of financial institutions in the 1980s, personal debt levels have grown substantially and savings levels have diminished to a fraction of what is necessary for healthy personal finances, for the reason that these two variables are in inverse ratio to each other. Excessive debt and low savings do not only affect the individual, but also employers, as well as the country’s overall economy. Due to excessive debt individuals can experience destructive financial failure such as broken homes or divorce, stress, underperformance at work, deterioration of financial health and bankruptcy. All of these consequences of excessive debt and low savings have damaging effects on the quality of life of the individual. The personal aspects of an individual’s life will also influence his work, and therefore his employer, negatively. Low productivity, absenteeism, organisational commitment and work-time used, all have a negative impact on the employer and therefore also the economy. Firstly, it affects the economy indirectly because of low productivity of employees. Secondly, it affects the economy directly by influencing economic variables such as investments, inflation, interest rates, the value of the rand and overall economic growth. A lack of basic financial management knowledge is one of the main reasons why individuals tend to make bad financial choices. Gender, age, income and education level could all impact on financial literacy and the effect that this could have on the personal finances of the particular individual. This study aimed to acquire information regarding the debt management practices of all enrolled students attending management programmes at the University of the Free State’s School of Management during 2005. The secondary objectives also included were to evaluate the importance of financial literacy and effective personal financial management, to determine the different sources of debt used, to ascertain the extent of household debt accumulated and the percentage of disposable income spent on each form of debt, to determine the extent of savings by individuals and to assess the impact of excessive debt on stress and productivity in the workplace. In all of these objectives the four demographic variables, namely gender, age, income and qualifications, were taken into consideration. The target population consisted of 425 enrolled students for 2005. It was decided to make use of the whole population and that decision eliminated a representative sample. Two hundred and eighty six students completed the questionnaires. The results showed that the total average percentage paid each month on debt equals 62,1%. In general terms that means that 62,1% of all available disposable income goes to the repayment of debt, leaving only 37,9% of the disposable income for general monthly expenditures and savings. According to the 2006- figures the household debt to disposable income ratio is 73%, with 28% of the salary not spent on debt repayment. High levels of dissatisfaction were detected among the respondents concerning their knowledge of personal finances, perceived control of personal finances, confidence in managing money and making investment decisions; they were concerned about their debts, savings and whether they had adequate retirement funds; they were also pessimistic about their financial future and experienced high levels of financial stress that interfered with their daily responsibilities. There were also high levels of poor financial management in not setting money aside for savings or retirement, not budgeting and not repaying credit cards in full to avoid financial charges. The respondents will be able to live an average of 5-6 months on their savings only if they should not be able to work. The main reason these individuals are not saving is that they feel that they do not have enough money to save (74,3%), while a staggering 13,2% indicated that they have not thought about saving. Individuals who do not feel in control of their personal finances were found to think that they would not have enough money on which to live throughout retirement; they feel pessimistic about the future and experience extreme financial stress; and they do not follow a weekly or monthly budget. | en_ZA |
| dc.identifier.uri | http://hdl.handle.net/11660/7397 | |
| dc.language.iso | en | en_ZA |
| dc.publisher | University of the Free State | en_ZA |
| dc.rights.holder | University of the Free State | en_ZA |
| dc.subject | Finance, Personal | en_ZA |
| dc.subject | Budgets, Personal | en_ZA |
| dc.subject | College students -- South Africa -- Bloemfontein -- Finance, Personal | en_ZA |
| dc.title | Debt and the management of personal finances | en_ZA |
| dc.type | Dissertation | en_ZA |