“Financial stress can threaten a student’s chances of succeeding at university. You can never be free, if you are haunted by debtors and poor credit records. Relying on friends, family and government to stay alive does not mean freedom.
The road to financial freedom is to get rid of debt and start saving and investing to build your own wealth.” This was the advice KwaZulu-Natal (KZN) Finance MEC Ina Cronjé gave to students at the Durban University of Technology (DUT) today (16 July 2013) at a workshop on financial education for government bursary holders and students.
MEC Cronjé encouraged students to get their spending habits under control while they are still young. “How sad to learn about students who have already been blacklisted by the time they start working!”
Quoting the latest Report by youth marketing company Student Village and Unisa’s department of marketing and retail management, she mentioned that student debt has more than doubled in the past three years, with 20% of students admitting to owning a credit card in the 2012 survey, compared to 9.5% in 2010. Nearly a quarter of students are in debt, most of it through retail clothing.
While urging students to get their finances in order and start saving for a better future, she also questioned some retail stores and banks’ ethical behaviour “to give credit to students, whose only ‘income’ very often is allowances from their parents or bursaries from government and private companies. They should actually be checking the students’ backgrounds before offering them credit,” she said.
She warned that being blacklisted means that the students will struggle to get credit or a loan, even for something important like their studies, a house or a car. A poor credit record holder is also “punished” with a higher interest rate or asked to pay a big deposit. Most importantly it can influence their careers and job prospects.
“Financial institutions and government will not recruit you in a position that requires trust, honesty and entails handling of cash or finances if you don’t have a clean credit report. With good reason: We want to protect ourselves and our clients from possible theft. When one is in financial trouble it becomes very tempting to put your fingers in the till,” MEC Cronjé said.
The workshop was attended by 300 students, who were given a hand in developing healthy spending habits and learning the fundamental principles of acquiring wealth (Budgeting, Saving & Investment and Consumer Rights). More workshops will follow at other KZN tertiary institutions and campuses.
South African Savings Institute (SASI) chair Prem Govender said it’s imperative that students are properly guided on money management, particularly while they are still studying so that they are properly equipped to manage their earnings efficiently and effectively from the first paycheque. “SASI is proud to be associated with this initiative which we hope will give these students a head start with financial planning and saving.”
Presenting the theme “Wanna be rich? Here is where you start,” Ginger Bester from the Financial Services Board reminded students that the way they deal with their personal finances now will impact on every aspect of their life in the future. It could mean the difference between being an independent person creating your own destiny or having to depend on others.
“Financial planning is a plan for wealth creation and independence in life.”
Zonke Majola of the National Credit Regulator taught students about their rights and responsibilities and informed them about the progress on Credit Exemption.
Mandla Cele of the National Student Financial Aid Scheme of South Africa (NSFAS) gave clarity on student loans and the role of NSFAS in student live. “It is important that students know who is eligible to receive funding, as well as understanding the different funding categories.”
Speaking on behalf of the Durban University of Technology, Dr Delysia Timm said, “DUT welcomes this initiative by KZN Treasury and its partners to assist DUT students. We are currently engaged in a curriculum renewal project with a student-centred approach and focussing on meeting the needs and not the wants of students in Higher Education.
A critical General Education Module that will be introduced in 2015 is a module covering basic competencies for handling their finances and it will be assessed and be credit bearing. We are also aware of the great financial debt that some families and students incur whilst at university and the need for students to be moneywise. We regard this workshop as very important for our students and welcome ongoing collaborative efforts to assist our students and in turn their communities and society at large.”
