African Generation Y Students’ Attitudes towards Personal Financial Planning

Abstract

Personal financial satisfaction arises from the ability to manage financial resources effectively. Individuals today face great challenges in managing their finances due to increased exposure to marketing activities, stemming from increased competition for consumers’ money. However, even though various business courses comprise financial management content that focuses on the importance of managing and maximising wealth, students express little concern about their financial status, future wealth and retirement planning, This article reports on a study conducted in South Africa to determine African Generation Y students’ attitudes towards personal financial planning. The South African Generation Y cohort, defined as individuals born between 1986 and 2005, accounted for an estimated 38 percent of the country’s population in 2013. In terms of race, the African portion of this cohort accounted for approximately 83 percent of this cohort and 32 percent of the total South African population. Therefore, the significant size of the African Generation Y market makes them salient to industry professionals, including financial institutions and those involved in financial management, especially in financial planning. Despite the importance of this market segment, their consumer behaviour remains under researched in general, specifically concerning their attitudes towards personal financial planning. In order to address this shortfall in the literature, a structured, self-administered questionnaire was used to gather data on personal financial planning attitudes from a non-probability convenience sample of 500 African Generation Y students across two South African public higher education institutions’ campuses located in the Gauteng province. The collected data was analysed using t-tests. According to the results, African Generation Y students have a significant positive attitude towards personal financial planning. This article concludes with recommendations for financial institutions, including banks, insurance- and investment companies regarding effective ways to convey financial knowledge and product information to deliver improved financial service to this segment.

DOI: 10.5901/mjss.2014.v5n21p111