KwaZulu-Natal Finance MEC Ina Cronje tells students at the Durban University of Technology to take action and be more responsible and manage their personal finances and spending habits to prevent qualifying and entering the labour market with massive debt on their shoulders.
Cronje, talking at a workshop on financial education for government bursary holders and students, enlightened students of the fact that national student loan debts have exploded in the last 3 years. She advised students to take more control of their spending habits and monthly budgets and realize that it was in their hands to minimize their financial debts while they are still young.
Recently their have been media reports with regards to the number of students who own credit cards raising questions and concerns pertaining to students creating debt for themselves, and in some cases even being black-listed, prior to completing their degrees and earning a salary.
Cronje told students that the pressures stemming from financial stress is capable of having significant consequences and in some cases have an affect on their odds of succeeding at university. She reminded students that while they held any debt they would never be free and will continually be at the mercy of debt collector or agencies. Most importantly of all, debts translates into poor credit records that can take a considerably long time to rectify. “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” she said.
According to recently available research studies carried out by Student Village and Unisa’s department of marketing and retail management, has revealed that national student debts more than doubled over the past few years. Furthermore, student owning credit cards has jumped from 9.5% in 2010 to 20% in 2012. Somewhere around a quarter of all students nationally are presently in debts and the vast majority of spending is on clothes.
While encouraging students to act more responsibly and manage their personal finances significantly better, Cronje at the same time questioned the ethics of retail stores and banks for granting credit cards to students who are not working or earning an income. In many cases, a students only income is an allowance from their parents or bursaries from government and private companies”. She called on all retails stores and banks to act responsibly and do their due diligence and check the financial backgrounds of all clients prior to granting any credit.
Cronje also gave a bit of career advise highlighting the fact that employers, financial institutions and government will not employ an individual for a position that requires trust and honestly when dealing with cash or finances if they don’t have a clean credit record. The primary reason being to avoid the possibility of theft and also to protect their clients.
“When one is in financial trouble, it becomes very tempting to put your fingers in the till,” Cronjé said.