About MoneyEQ

Engin Cents Innovations (Pty) Ltd created MoneyEQ as a solution for the over-indebted society we live in. Financial advisors, financial planners, credit providers and regulators have failed the consumer in that no advice, credit granting criteria nor regulations have prevented the over indebtedness crisis we now find ourselves in.

MoneyEQ identifies a consumer's financial character by examining the relationship between the consumer's emotional intelligence & financial behavior. Advice given takes this into consideration in order to connect with the consumers' financial character and guide them appropriately.

Society's shift away from vertical (parental / teacher leactures) to horizontal (peers) advice, together with consumers' mistrust of traditional financial advisors, has resulted in the MoneyEQ Community. In this community platform, peers with similar financial characters can advise each other based on their past financial experiences and lessons.

Partnership with Summit Financial Partners

Engin Cents Innovations formed a partnership with Summit Financial Partners (Pty) Ltd (Summit) in order to deliver an accurate, relevant and well-tested solution.

Summit is an independent company consisting of financial wellbeing experts who focus on improving quality of life through financial consulting, training and coaching.

Summit's extensive experience in helping over-indebted consumers regain financial control have led them to question the impact of psychological factors on an individual's financial health. In 2010 Summit embarked on research for Engin Cents Innovations to investigate this correlation by exploring the relationship between psychological wellness as operationalized in the sense of coherence construct, and financial health. Insights and expertise from both the financial and psychological fields were combined in the study.

About the Constructs

Life Orientation

Over a period of 36 years, scientific study in the field of positive psychology has concluded that psychological wellness is a multi-dimensional phenomenon with optimal living at its core. A construct from the field of positive psychology that is of particular interest to this study is the salutogenic construct of Sense of Coherence (SOC) as identified by Aaron Antonovsky. Much international research has been done on SOC and the usefulness of the construct to explain psychological health is widely supported.

An individual's SOC represents a basic life orientation that enables one to consider the best coping strategy for a specific problem. It expresses the extent to which one has a pervasive, enduring and dynamic feeling of confidence that one's internal and external environments are predictable and that there is a high probability that matters will work out as well as expected. It therefore facilitates one's ability to perceive the environment and one's circumstances realistically and also to respond and act in a meaningful and appropriate way to the demands of one's life. The salutogenic approach accepts that stress, uncertainty, trauma and other difficulties are an inevitable part of life. In spite of these stressors, however, individuals with a strong SOC manage to take control and some may even thrive under difficult circumstances.

Salutogenic functioning and SOC in particular consists of three constructs namely comprehensibility, manageability and meaningfulness The comprehensibility construct refers to a constructive cognitive function through which individuals perceive confronting environmental stimuli as understandable and constructive and they can use it to facilitate effective decision making. The manageability construct refers to the extent to which individuals perceive that their resources are adequate to meet the demands posed by external stressors and challenges. Meaningfulness relates the extent to which individuals feel that life makes sense and that challenges and stimuli encountered are worthwhile to address and resolve.

Financial Wellbeing

On the one hand financial health carries a rather objective meaning, referring to the ability to manage income and expenses in a manner that result in an acceptably stable and manageable financial situation, which including a manageable debt situation. Financial health, however, also involves the subjective experience of financial wellbeing, which implies the perception of being able to manage a good and satisfactory life within the boundaries of one's income. For the purpose of this study, Hobman's (2010) definition of Financial Capacity was used as a guideline, namely the ability to make ends meet, to keep track of finances, to plan ahead, to choose financial products sensibly and to stay informed about financial matters.

About the Study

A cross-sectional survey design was applied and a quantitative relational approach was followed through which the statistical relationships between the relevant variables, namely SOC and financial health, were analyzed.

An electronic survey was circulated to a population of 100 000 employed individuals. This group represented all job and income levels with access to email, in a broad variety of industries. Participation was voluntary, anonymous and confidential and 7183 completed questionnaires were returned.

The survey included a 6-item Orientation to Life questionnaire as well as a variety of financial questions relating to circumstances and habits. These financial questions were selected based on Summit's experience with over indebted individuals and included both objective and subjective indicators of financial wellbeing.

About the Results

The results of the study showed a very high correlation between an individual's Sense of Coherence and their financial health. An example of the results was that the highest SOC rated consumers had a 32 times lower risk of defaulting on debt obligations than the average.

So significant was the correlation that it was put to use almost immediately by leading credit providers in predicting their clients' future behavior.

Summit went a step further and also identified specific financial behavior and habits that further predicts an individual's vulnerability to financial difficulty, specifically in terms of their ability to identify warning signs and to respond proactively and effectively.

Based on the findings, appropriate weights were allocated to different factors to develop an instrument aimed at predicting consumers' ability to manage their personal finances in a healthy and responsible way. This resulted in the development of MoneyEQ.

About the Application

Money EQ assesses consumers' personal competence in handling financial matters. The value applies to various role players, including:

• Consumers, who will benefit from understanding their own financial sense, thus being aware of potential pitfalls and knowing what to do to minimize their risk of finding themselves in financial difficulty;
• Employers, who will benefit from information regarding customizing interventions targeted at improving the financial health of their employees;
• Debt counselors, who will benefit from an increased understanding of their clients' frame of mind and a prediction of the client's ability to take and commit to positive action;
• Credit providers, who will benefit from knowing their client's ability to act financially responsible, thereby minimizing risk.

For more information contact us.