AN ANALYSIS OF PERSONAL FINANCIAL LITERACY AMONG ADULTS IN VHEMBE DISTRICT, A RURAL MUNICIPALITY IN SOUTH AFRICA

Abstract

Consumers in rural and low-income areas are the most financially vulnerable and are facing challenges with their finances and depend mostly on unsecured loans to finance their daily expenses. This has been exacerbated by global financial crises, which left many consumers in financial strains. The purpose of this paper is to measure the level of financial literacy focusing on the areas of day-to-day money management, financial planning, choosing appropriate financial services and products, and financial knowledge and understanding. The quantitative research approach was used to collect primary data among adults in Vhembe District Municipality (VDM), a rural and low-income municipality in South Africa. Primary data were analyzed through descriptive statistics. The results indicate that the level of financial literacy among adults in VDM is low at 38.73%. The low levels of financial literacy have serious consequences for an adult’s personal financial management skills and lead to their inability to make correct financial decisions. It is apparent that an individual’s level of financial literacy has become important in how individuals manage their finances in today’s complicated financial world. The paper concludes by suggesting interventions that could help adults to improve their level of financial literacy, manage and sustain their financial well-being.