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Understanding the financial priorities of black African middle-class students at the university of KwaZulu Natal graduate school of business and leadership master of business administration programme.

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The prototypical Black African middle-class man and woman in South Africa drives a luxury-brand car, lives in a top suburban home furnished in the latest décor, wears luxury brand-name clothing, and eats out at trendy restaurants. This conspicuous consumption trend is in many ways to be expected as an outcome of upward mobility, considering the strides the current democratic South African government has made to ensure that Affirmative Action (AA) and Black Economic Empowerment (BEE) initiatives redress the inequalities of the past. However, in a significant number of cases, these men and women do not have any investments, have no disposable cash for emergencies, or the ability to afford to take well-deserved and necessary holiday breaks or even important lifestyle requirements such as accessing good quality education and healthcare for themselves and their families. The author’s experience, suggests that there is immense pressure to engage in conspicuous consumption through the acquisition of such symbols of class and wealth. It would appear however that the prioritization of such luxury and conspicuous symbols of wealth has in the main denied this new middle-class, of the ability to acquire real wealth, in the form of investments, cash reserves, adequate retirement schemes, leisure and other insurance that guarantee a healthy and stable lifestyle. In addition, the apparent lack of basic financial literacy skills in regards to the components of a healthy financial personal balance sheet, which helps to avert the kind of high debt that cannot be offset by any assets thus resulting in far greater personal liabilities. Anecdotal evidence suggests that there are various sources from whence the pressure to ‘have the best’ arises. In the African community, there are two categories of family, the immediate (comprising of one’s spouse if married, or parents and siblings if unmarried) and the extended family (comprising of aunts, cousins, and others). The immediate family ‘owns’ one’s success, and feel that they have ‘made it’ through one of the family member’s success when they see their visible/ external symbols of success, such as luxury cars, houses and clothes. In an attempt to make loved ones feel proud, the “successful” individuals will go to the extent of accumulating massive debt mainly through the acquisition of expensive items. The other source of pressure is from the extended family. There is often competition among extended family members, where parents would compete through their middle-class children’s possessions. Finally, there are friends who represent another source of pressure. It is not atypical to find the friend who was the underdog in school now wanting to prove that their status has improved, and the historical trendsetter trying hard to stay on top through showing off by owning expensive possessions. All these pressures work toward creating a people who have lives that are steeped in debt and an accompanying unhealthy financial standing. However, further anecdotal evidence suggests that there are a good number of middle-class African families who do not appear to have experienced the aforementioned challenges; this raises an important question of how this group managed to circumnavigate the conspicuous consumption “trap”. It is for the reasons stated above that this author is undertaking a study of “Understanding the financial priorities of African middle-class using a sample of students from the University of Kwa-Zulu Natal Graduate School of Business.”


Master’s degree. University of KwaZulu-Natal, Durban.