Certain characteristics of financial management strategies of people living in extreme poverty

TL;DR

This paper investigates the financial management strategies of households living in extreme poverty in Hungary, combining survey data and in-depth interviews to analyze income, expenses, and borrowing behaviors.

Contribution

It provides a comprehensive analysis of financial practices in extreme poverty, integrating empirical survey data with qualitative insights to deepen understanding.

Findings

Households in extreme poverty have limited access to formal financial services.

Borrowing practices often involve informal and high-cost sources.

Financial management strategies are influenced by attitudes, behaviors, and socio-economic factors.

Abstract

This study presents the structure of financial management of incomes, expenses, and borrowing practices of households in extreme poverty, based on a survey conducted in two disadvantaged regions in Hungary. Additional to that, I shed light on financial management practices of households in extreme poverty based on the analysis of in-depth interviews. I draw theoretical conclusions and explanations, building upon the experiences of empiric materials about the attitudes and behaviors of financial management of households in extreme poverty, and the reasons and consequences thereof.