DETERMINANTS OF DEBT MANAGEMENT AMONG YOUNG EMPLOYEES IN THE CENTRAL REGION OF PENINSULAR MALAYSIA
One of the six components in personal financial planning is credit and debt management. Unlimited needs and wants and the increasing cost of living compel individuals to obtain credit and become involved in debt commitment to sustain their standard of living. However, inefficient debt management by individuals has brought about several negative consequences such as financial stress, over-indebtedness and, in extreme cases, bankruptcy. Thus, the aim of this study is to examine the level and determinants of debt management among young employees in Peninsular Malaysia aged 40 and below. Findings from multiple linear regressions show that gender, marital status, asset to debt ratio, saving ratio, debt to income ratio, self-esteem, and financial skills are significant determinants of debt management. However, ethnicity and house ownership are not found to be significant determinants. In addition, coefficient of determination (r2) shows that 26.1% variation in debt management is explained by determinants in the model. It is hoped that a greater understanding of the current level of debt management and the factors hindering debt management can help young employees to become financially prudent and in the long run decrease the number of young employees being declared bankrupt.
Keywords: Debt Management, Financial Management Skills, Self Esteem