Abstract
Contemporary economic models often neglect the intricate web of non-rational human behaviour influenced by social factors. The study delved into the multifaceted realm of the financial behaviour of young professionals, aiming to uncover the influence of social relationships on financial decision-making. Through qualitative interviews with 27 participants, the study illuminated the intricate connections between financial choices and social environments, exploring the influences of family, friends, and colleagues on the financial decisions of young professionals.
The findings underscored the pivotal role that social relationships play in shaping financial behaviour. Participants' narratives revealed the influence of familial expectations, experiences, and financial habits within the family environment. Furthermore, friends exerted positive and negative effects. Shared values among friends fostered responsible financial behaviour while contrasting spending priorities challenged long-term saving aspirations. In the workplace, colleagues emerged as influential mentors, enhancing financial confidence, literacy, and resilience.
These insights held significant implications for multiple stakeholders. Young professionals gained a nuanced understanding of the subconscious factors that drove their financial choices, empowering them to make more informed decisions.
Financial institutions stand to benefit from a more profound comprehension of the influences identified in the study and their related behavioural nudges, enabling them to offer responsible and tailored financial products. Furthermore, government-related institutions may use the findings to develop more effective financial wellness education initiatives. This may be particularly relevant in a context such as South Africa, which is characterised by high household debt levels and limited financial literacy.
The study transcended conventional economic paradigms by embracing the intricate interplay of social relationships and financial behaviour, shedding light on the unseen forces that steer individuals' financial decisions. As we navigate the complex landscape of personal finance, recognising the impact of social ties offers a powerful tool for individuals and institutions seeking to foster healthier financial futures.
Keywords
Qualitative study; social environment; behavioural economics; behavioural finance; economic sociology