Investigating the level of financial literacy, materialism and savings behaviour of Millennials in Phokwane local municipality

Abstract

It has become essential for the millennial generation to know and continuously improve their financial literacy. Financial literacy assists this generation by making sure that they make the right financial decisions for themselves and their families. The South African economy is known as a consumption economy with a low national savings rate. Because of this consumption economy, materialism increases. It has been reported that the financial literacy rate of South Africa is greater than other emerging economies. However, due to its consumption culture the positive effects that financial literacy has on the financial decision that individuals make is not evident in South Africa if we consider the low savings rate. Therefore, the South African economy has been affected due to this low savings rate. Thus, a need to depend on foreign investment for growth exists. This study focused on millennials who reside in the Phokwane Local Municipality (PLM) (Northern Cape, South Africa). As such, the aim of this study was to determine the financial literacy level and materialism of millennials in the PLM and their savings behaviour. To achieve the aim of the study, the study made use of financial literacy, savings behaviour and materialism variables to gather quantitative data that was obtained from millennials residing in the PLM. The variables were then statistically tested and analysed to ascertain what the financial literacy level, materialism and savings behaviour of these millennials were. A sample size of a hundred and twenty-five millennials was used. The results from the analyses revealed that the millennials in the PLM have low levels of financial literacy and was thus classified as not being financially literate. It was also found through the data analysis, that this specific millennial generation were considered to be materialistic. Lastly, the results reflected that the savings behaviour of these millennials was deemed as good. As such, the study succeeded in investigating the level of financial literacy, materialism and savings behaviour of millennials residing in PLM. Based on these findings, recommendations were made to stakeholders in PLM to improve the financial literacy level, savings and the materialistic behaviour of millennials in this region.