Financial capability and emergency savings among South Africans living above and below the poverty line

dc.contributor.authorReyers, Michelle
dc.date.accessioned2019-08-26T08:50:15Z
dc.date.issued2019-07
dc.description.abstractEmergency savings provide a buffer against financial shocks, particularly among low‐income households. Despite the importance of these funds in lessening financial hardship, many households have not set aside emergency funds. It has been suggested that financial capability may play a role in financial behaviour. Therefore, this study considers whether financial capability is associated with saving for emergencies and whether there are differences in factors that predict emergency savings behaviour among those living below and above the poverty line. Using data from a sample of South Africans, logistic regression is used to determine the predictors of emergency savings. The study finds that those with higher levels of financial capability, related to financial self‐efficacy and having access to a bank account, are more likely to have emergency savings compared with those with lower levels of financial capability. However, no evidence is found to suggest a relationship between objectively measured financial knowledge and emergency savings. Therefore, the findings suggest that self‐assessed financial ability, as measured by financial self‐efficacy, might be more important than objectively assessed ability in the context of individuals making responsible financial choices. Differences in the predictors of emergency savings for those living above and below the poverty line related to socioeconomic and demographic differences, whereas the same financial capability predictors were significant predictors in both samples. The study provides unique insights into the predictors of emergency savings in a developing market context and identifies the characteristics of those who are likely to be financially resilient to unexpected economic shocks. The importance of the broader financial capability construct in predicting emergency savings, for both those living above and below the poverty line, suggests that programmes aimed at encouraging emergency savings should focus on enhancing financial self‐efficacy and financial inclusion.en_ZA
dc.description.departmentFinancial Managementen_ZA
dc.description.embargo2021-07-01
dc.description.librarianhj2019en_ZA
dc.description.urihttp://wileyonlinelibrary.com/journal/ijcsen_ZA
dc.identifier.citationReyers M. Financial capability and emergency savings among South Africans living above and below the poverty line. International Journal of Consumer Studies 2019;43:335–347. https://doi.org/10.1111/ijcs.12520.en_ZA
dc.identifier.issn1470-6423 (print)
dc.identifier.issn1470-6431 (online)
dc.identifier.other10.1111/ijcs.12520
dc.identifier.urihttp://hdl.handle.net/2263/71201
dc.language.isoenen_ZA
dc.publisherWileyen_ZA
dc.rights© 2019 John Wiley & Sons Ltd. This is the pre-peer reviewed version of the following article : Financial capability and emergency savings among South Africans living above and below the poverty line. International Journal of Consumer Studies 2019;43:335–347. https://doi.org/10.1111/ijcs.12520. The definite version is available at : http://wileyonlinelibrary.com/journal/ijcs.en_ZA
dc.subjectEmergency savingsen_ZA
dc.subjectFinancial capabilityen_ZA
dc.subjectFinancial inclusionen_ZA
dc.subjectFinancial knowledgeen_ZA
dc.subjectFinancial self‐efficacyen_ZA
dc.subjectPrecautionary savingsen_ZA
dc.subjectSouth Africa (SA)en_ZA
dc.titleFinancial capability and emergency savings among South Africans living above and below the poverty lineen_ZA
dc.typePostprint Articleen_ZA

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