A garnishee order (also known as an Emolument Attachment Order), is a court order instructing an employer to make deductions from an employee’s salary, often the result of the individual no longer being able to make debt repayments. Before getting into bad debt and facing the consequences of a garnishee order, here is what you […]
26 January 2015
The National Matric results released earlier this week revealed a shocking 2.4 percentage point drop in the national pass rate year-on-year. Contributing to this result, Kwazulu-Natal comprising the largest amount of matriculants in the country, dropped to 8th position in the national rankings. As if these results are not worrying enough, they still do not reveal a true reflection of the South African education standards. Students who drop out of the system before they reach matric are not accounted for and the large majority of students who pass by the ‘skin of their teeth’ are deficient in mathematics, science and literacy.
But what impact will this have on the bigger picture?
According to Kelli Knutsen, Marketing Manager of DebtBusters, “The South African youth lack both the means and the foundations for simple money management and saving.”
Due to the ramifications of Apartheid and other inequalities burdening South Africans, the youth have not only faced difficulties with gaining access to formal savings and investment mechanisms, but they have also not been taught and educated on how to effectively work towards financial independence.
Kelli Knutsen goes on to say, “Poor money management skills will pave the road to bad financial habits, such as purchasing on credit and the inability to ‘save for a rainy day,’ for the youth. Habits which lead to accruing debt.”
Schools, family members, employers and even credit providers, have not delivered adequate guidance and financial literacy to equip the youth of South Africa to budget and save by postponing consumption.
“The average age of DebtBusters clients under debt counselling has declined significantly over the years. As previously reported on, from 2008 to 2013 the average age of DebtBusters clients dropped drastically form 44 years to 34 years of age. Currently, the number stands at 32 years of age. This number will only continue to drop as time goes by, given the current debt statistics revealing a shocking 10.52 million consumers with impaired credit records,” says Knutsen.
Once over-indebted, the youth will be subjected to more borrowing to repay existing debt and to meet day-to-day obligations, leading to a debt-trap.
Knutsen states, “The youth are in for a tough ride. If you have debt when you are young, you cannot save for retirement. We need to ensure that the youth better their mathematical and literacy skills to engrain financial education and a savings culture from a young age. It is vital that South Africans invest in financial knowledge, work hard at school and work towards financial freedom.”