An exploratory study to evaluate the factors influencing the spending pattern of

young adults with reference to the Mumbai metropolitan region

SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE

BACHELOR OF BUSINESS ADMINISTRATION

Submitted to

Prof. Mukund Madhav Tripathi

Submitted by:

Name of the student: Roll number

Labdhi Shah U305

Jayitri Nayak U183

Ritvik Mittal U283

Nishika Pherwani U289

School of Commerce

NMIMS UNIVERSITY
Plot no2, Sec 33, Pethpada metro station,

KHARGHAR-410210

2022-2023

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CONTENTS

Sr no. Topic

1. Introduction
2. Literature Review
i. How e-wallets encourage excessive spending behavior among young
adult consumers
ii. Financial Attitudes and Responsible Spending Behavior of Emerging
Adults: Does Geographic Location Matter
iii. Parental Financial Education During Childhood and Financial Behaviors
of Emerging Adults
iv. Factors Influencing Online Buying Behaviour of College Students:
A Qualitative Analysis
v. Categorizing the money management behaviour of young consumers
3. Research Design
Background
Statement of the Problem Research Questions
and objectives Methodology
a) Scope of Research
b) Parameters and Variables
c) Research Questions
d) Research Objectives
e) Hypothesis Formulation
f) Questionnaire Design
4. Analysis and Interpretation
Background
Methodology

5. Findings and Scope

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INTRODUCTION:

Young adulthood is a critical period in the life cycle that is marked by significant changes

and transitions. This period is characterized by a range of opportunities, such as starting a

career, furthering education, and establishing relationships, but also by challenges, such as

uncertain job prospects, high levels of debt, and the need to make important financial

decisions. Understanding the factors that influence young adults' spending behaviour is

essential, as it has significant implications for individual and societal welfare.

Spending behaviour refers to how young adults allocate their financial resources to meet their

needs and wants. This includes decisions related to spending on essentials such as housing,

food, and transportation, as well as discretionary spending on leisure activities and non-

essential items. Financial decision-making during young adulthood is complex, as young

adults must balance competing financial demands and make choices that reflect their personal

values and goals.

The spending behaviour of young adults has become a subject of increasing interest in recent

years. The rise of digital technology and the changing nature of work and employment have

led to significant shifts in how young adults manage their finances. Moreover, the financial

pressures associated with rising housing costs, student debt, and uncertain job prospects have

made it more challenging for young adults to make ends meet. As a result, understanding the

factors that influence young adults' spending behavior has become an essential area of

research.

SCOPE:

The scope of this study is to investigate the factors that influence the spending behavior of

young adults. The study will focus on a broad range of factors, including demographic

characteristics, income, education, financial literacy, and behavioral factors. The study will

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aim to identify the most significant determinants of spending behavior among young adults

and explore how these factors interact to shape financial decision-making.

METHOD:

The study will employ a quantitative research design, utilizing survey data from a

representative sample of young adults. The survey will be designed to collect data on

demographic characteristics, income, education, financial literacy, The data will be analyzed

using a range of statistical methods, including regression analysis and structural equation

modeling. The study will also use qualitative methods, such as focus groups and interviews,

to explore the subjective experiences and attitudes of young adults towards spending

behavior.

LITERATURE REVIEW

ARTICLE REVIEW AND RESEARCH GAP IDENTIFICATION

1. How e-wallets encourage excessive spending behaviour among young adult

consumers?

Hendy Mustiko Aji, Wiwiek Rabiatul Adawiyah

Objectives:

The objective of the article is to investigate the link between e-wallets and excessive

spending among young adult consumers. The author's goal is to uncover the elements that

drive this behaviour and to give insight into how e-wallets might influence spending patterns.

Methodology:

An exploratory sequential or QUAL-QUANT design, combining qualitative and quantitative,

is used in this study. It is a type of mixed-method design consisting of both the core and

supplementary methods. The qualitative method is conducted in Study 1 using online focus

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 group discussion to answer ‘‘why’’ and ‘‘how’’ questions, whereas the quantitative method is

used in Study 2 to test or examine the hypothetical model. The questionnaires are extracted

from focus group discussion in Study 1, which is further tested for validity and reliability and

model estimation in Study 2. The model is evaluated using structural equation modelling.

Summary:

The author investigates the elements that contribute to excessive purchasing behaviour, such

as ease, rapid pleasure, and a lack of spending transparency. The essay discusses how e-

wallets might impact spending patterns and emphasises the need of financial institutions and

service providers better understanding this link. The study's goal is to increase awareness of

the possible influence of e-wallets on consumer spending behaviour and to give advice for

preventing excessive spending behaviour among young adult e-wallet users.

Research Gap and further research scope:

1. An in-depth examination of the influence of e-wallets on consumer purchasing patterns,

including a comparison of spending behaviours between e-wallet users and non-users.

2. An investigation of the effectiveness of financial education and tools in decreasing excessive

spending among young adult customers.

2) Financial Attitudes and Responsible Spending Behaviour of Emerging Adults: Does

Geographic Location Matter?

Bryce L. Jorgensen, Diane Foster, Jakob F. Jensen, Elisabete Vieira

Objectives:

The paper seeks to investigate the association between geographic location and financial

attitudes and responsible spending behaviour among emerging adults. The authors want to

investigate variations in financial attitudes and spending behaviour among emerging adults

residing in cities, suburbs, and rural regions, as well as to detect any potential regional

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 disparities in financial literacy and financial decision-making.

Methodology:

The article's research technique is a survey-based study. The authors conducted a

countrywide survey of 18-26-year-old emerging adults to learn about their financial attitudes

and spending habits. The questionnaire asked on financial literacy, financial decision-making,

spending habits, and geographic location. The acquired data was evaluated using descriptive

statistics, chi-square tests, and logistic regression analysis to uncover spatial disparities in

financial views and spending behaviour.

Summary:

The paper explores the association between emerging adults' geographic location, financial

views, and responsible spending behaviour. The authors discovered that emerging adults who

lived in cities had greater levels of financial literacy and made more responsible financial

decisions than those who lived in suburbs or rural regions. The study also found that

emerging adults in cities were more likely to create a budget and prioritise future savings,

whereas those in rural settings were more likely to favour present spending over future

savings. The authors conclude that geographic location influences financial views and

responsible spending behaviour among young adults, and they urge that financial education

programmes take this into account.

Research Gap and further research scope:

More study is needed to acquire a better understanding of the variables that contribute to

these variations, as well as the role that geography plays in influencing financial views and

responsible spending behaviour among young adults.

Following include the scope for further studies:

1. Including a broader and more varied sample of emerging adults from various areas and

socioeconomic backgrounds in the research.

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2. Examining the influence of various factors on financial views and responsible spending

behaviour, such as family history, education, and work.

3. The long-term implications of geographic location on financial attitudes and responsible

spending behaviour, as well as how they evolve over time, are being investigated.

4. Investigating the effect of financial education programmes in moulding emerging adults'

financial views and appropriate spending behaviour.

3) Parental Financial Education During Childhood and Financial Behaviours of Emerging

Adults

Ashley B. LeBaron, Erin K. Holmes, Bryce L. Jorgensen, Roy A. Bean

Objectives:

The goal of the article is to investigate the link between parental financial education during

childhood and emerging adult financial behaviours. The authors want to investigate the

influence of parental financial education on the financial decision-making and spending

behaviour of emerging adults.

Methodology:

The article's research technique is a survey-based study. The authors conducted a

countrywide survey of 18-26-year-old emerging adults to learn about their financial habits

and the financial instruction they acquired from their parents as children. Financial literacy,

financial decision-making, spending behaviour, and parental financial education were all

included in the poll. The obtained data was evaluated using descriptive statistics, chi-square

testing, and regression analysis to determine the association between parental financial

education and emerging adult financial habits.

Summary:

The article "Parental Financial Education During Childhood and Financial Habits of

Emerging Adults" looks at the link between parental financial education during childhood

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 and emerging adult financial behaviours. The authors discovered that when compared to

those who did not receive financial education as children, emerging adults who received

financial education from their parents were more likely to have higher levels of financial

literacy, make more responsible financial decisions, and have better spending habits.

Research Gap:

1. Including a broader and more varied sample of emerging adults from various areas and

socioeconomic backgrounds in the research.

2. Examining the influence of various factors on emerging adults' financial practises, such as

family history, education, and work.

3. Investigating the long-term consequences of parental financial education on emerging adults'

financial practises and how they evolve over time.

The essay identifies a study gap in our understanding of the link between parental financial

education throughout childhood and emerging adult financial practice.

4) Factors Influencing Online Buying Behaviour of College Students: A Qualitative

Analysis

Vilasini Jadhav, Monica Khanna

Objectives:

A Qualitative Analysis" is to identify and understand the factors that influence the online

buying behaviour of college students. This study aims to explore the college students'

perception and attitudes towards online shopping and the factors that drive their decision-

making process while making purchases online. The findings of the study are expected to

provide insights into the needs, motivations, and behaviour of college students while

shopping online, which can be useful for marketers, e-commerce companies, and academic

researchers.

Methodology:

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The methodology used in the study "Factors Influencing Online Buying Behaviour of College

Students: A Qualitative Analysis" is qualitative research. The data was collected through in-

depth interviews and focus group discussions with a sample of college students. The purpose

of the interviews and focus group discussions was to gather rich, in-depth information about

the participants' experiences and attitudes towards online shopping.

The data collected from the interviews and focus group discussions was analysed using

thematic analysis, which is a method used to identify patterns and themes in qualitative data.

Thematic analysis involved coding the data into different categories, identifying recurring

themes, and analysing the relationships between the themes. This approach allowed the

researchers to gain a deeper understanding of the factors that influence the online buying

behaviour of college students.

Summary:

The study "Factors Influencing Online Buying Behaviour of College Students: A Qualitative

Analysis" aims to understand the factors that influence the online buying behaviour of college

students. This study adopts a qualitative research approach, using semi-structured interviews

with college students to gather data. The collected data is analysed to identify the key factors

that influence the online buying behaviour of college students.

The study found that college students are influenced by a number of factors when making

online purchases, including convenience, price, recommendations from friends and family,

product reviews, and delivery time. The study also found that trust and security were

important factors that influenced the online buying behaviour of college students. The study

provides insights into the online buying behaviour of college students and the factors that

influence this behaviour. The findings of the study can inform the development of effective

marketing strategies for college students and help retailers and e-commerce businesses better

understand this consumer segment. The study contributes

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to the existing literature on online consumer behaviour by providing a qualitative analysis of

the online buying behaviour of college students.

Research gap and further Research Scope:

The study "Factors Influencing Online Buying Behaviour of College Students: A Qualitative

Analysis" aims to fill a gap in the existing literature by focusing specifically on the online

buying behaviour of college students. While there have been many studies on consumer

behaviour and online shopping, few have focused specifically on the online buying behaviour

of college students. This study seeks to fill this gap by using a qualitative research approach

to gain a deeper understanding of the attitudes, perceptions, and experiences of college

students when shopping online.

The qualitative approach adopted in the study allowed for a more in-depth and nuanced

exploration of the factors that influence the online buying behaviour of college students. The

findings of the study can contribute to the development of a more comprehensive

understanding of this topic and provide insights that can inform the development of effective

marketing strategies and e-commerce platforms.

The scope of the study "Factors Influencing Online Buying Behaviour of College Students: A

Qualitative Analysis" is limited to college students and their online buying behaviour. The

study specifically focuses on the attitudes, perceptions, and experiences of college students

when shopping online. The sample size of the study is also limited to a sample of college

students, and the findings may not necessarily be generalizable to other age groups or

consumer populations.

The study is intended to provide insights into the specific needs, motivations, and behaviour

of college students when shopping online. The findings of the study can be useful for

marketers, e-commerce companies, and academic researchers who are interested in

understanding the factors that influence the online buying behaviour of college students and

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developing strategies to reach this consumer segment effectively. However, it is important to

note that the scope of the study is limited, and further research is needed to gain a more

comprehensive understanding of the topic.

5) Categorising the money management behaviour of young consumers

Jill Bamforth, Gus Geursen

Objectives:

The study seeks to explore and understand the various approaches that young consumers use

to manage their money and how these approaches may affect their purchasing behaviour.

Despite being a significant purchasing group, there is limited knowledge about the decision-

making process of young consumers when it comes to managing their finances. The study

aims to fill this gap by identifying and categorizing different money management approaches

that could impact purchasing behaviour.

Methodology:

The data for this study was collected through focus groups with 40 participants who were

between the ages of 18 and 24 years old. The participants were recruited from three different

campuses of a university located in Melbourne, Australia, and were selected through campus

notices. The authors used the focus group method to gather in-depth information and insights

from the participants on their approaches to money management and how these approaches

may impact their purchasing behaviour.

Summary:

The study authors used a survey questionnaire to understand the money management styles of

the respondents. By analysing the answers, they identified three different approaches to

money management. These were conservative money managers, creative money managers,

and entrepreneurial money managers. Conservative money managers were those who focused

on being safe and secure with their money and avoiding risk. They often preferred to save

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rather than spend and sought to manage their finances with a long-term view. Creative money

managers, on the other hand, were those who used their financial resources in a flexible and

imaginative way to achieve their goals. They were often willing to take calculated risks to

achieve their financial objectives. Entrepreneurial money managers were individuals who

sought to make the most of their financial resources by creating new opportunities or

ventures. They were often innovative in their approach to money management and sought to

find new ways to make money. The authors noted that the three approaches represented

different ways of accommodating economic, social, and psychological influences in their

money management approach. By identifying these approaches, the authors aimed to shed

light on how individuals make decisions about their finances and to highlight the different

attitudes and behaviours that influence their money management strategies.

Research gap and further research scope:

The research gap in the study is that it is based on a small sample of only 40 individuals in

Australia and therefore the findings may not be generalizable to other countries or cultures.

The study only focuses on the three distinct approaches to money management identified

from the focus groups, but it does not explore the impact of other external factors that may

also influence young consumers' money management decisions.

Additionally, the study does not investigate the long-term outcomes of the identified

approaches to money management on financial well-being or purchasing behavior. Further

research could explore the broader context of money management approaches in young

consumers and examine the impact on their financial well-being, consumer decision-making,

and overall financial literacy.

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 RESEARCH QUESTIONS AND OBJECTIVES:

The primary research problem the study aims at solving is how can financial knowledge be

accessible to each and every section of the society despite of socioeconomic, demographic,

personal and cultural barriers. Furthermore, we also aim to fill the research gaps that have

often been overlooked by multiple authors and researchers. Given below are some of the gaps

we plan to address:

• Negligence of long-term effects of financial illiteracy on personal development and financial

independence and growth.

• Spending patterns and behaviours of Indian students from multiple backgrounds and different

income groups.

• Comprehend the effects of personal and cultural upbringings on the financial literacy of an

individual.

• Investigating the effect of financial education programmes in moulding emerging adults'

financial views and appropriate spending behaviour in India.

• Impact of geographical locations on financial attitudes and responsible spending behaviour of

young adults.

METHODOLOGY

a) Scope of research:

The aim of this study is to better understand young adults' spending habits and tendencies.

The study will focus on determining the elements that impact their spending decisions, such

as income, education level, cultural background, and personal beliefs. This study's target

audience is young adults, who are commonly characterized as people between the ages of 18

and 30. The study may also look into disparities in spending habits and patterns depending on

demographic criteria including gender, race, and ethnicity.

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 The study's goal is to give insights on the sorts of goods and services that young adults are

most likely to spend (independent) their money on, as well as the variables (dependent) that

impact their purchase decisions. The study might also look into the impact of social media on

purchasing habits, as well as how young adults are impacted by their friends and social media

influencers.

Overall, the goal of this study is to give a thorough knowledge of young people' purchasing

habits and patterns, which may be utilised to guide marketing strategies and product

development focused at this crucial customer demographic

b) Parameters and Variables:

There are mainly 2 types of variables in the study namely, Dependent and Independent

variables

The dependent variable in this study is the spending behaviour and patterns of young adults.

This variable represents the outcome that researchers are trying to explain or understand.

The independent variables are the factors that are believed to influence the spending

behaviour and patterns of young adults. These variables are manipulated or measured to

examine their relationship to the dependent variable. Independent variables that are included

in the study are:

Demographic variables, such as age, gender, race, ethnicity, income, education level, and

cultural background

Psychological variables, such as attitudes towards spending, beliefs about money, personal

values, and psychological needs

Social media variables, such as the extent to which young adults use social media, the types

of social media platforms they use, and the influence of social media on their spending

decisions

Environmental variables, such as the influence of peers, family members, and cultural

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 norms on spending behaviour

Financial variables, such as financial security, debt, and saving habits

Experiential variables, such as the types of experiences young adults are likely to spend

money on, such as travel or attending events

Occupational variables, such as type of occupation, employment status, work experience,

and income level

By manipulating or measuring the independent variables, we can examine how they influence

the dependent variable, which is the spending behaviour and patterns of young adults.

c) Research Questions:

1) What are the spending behaviours and patterns among young adults in terms of the types

of goods and services they spend money on, the amount spent on each category of goods

and services, and the frequency of spending?

2) What demographic factors (such as age, gender, race, ethnicity, income, education level,

and cultural background) are associated with spending behaviours and patterns among

young adults?

3) What is the influence of social media on spending behaviours and patterns among young

adults? How are young adults influenced by their peers and social media influencers?

4) How do environmental factors, such as the influence of peers, family members, and

cultural norms, impact spending behaviour among young adults?

d) Research Objectives:

1) To identify the most common types of goods and services that young adults spend money

on, as well as the amount spent and frequency of spending for each category.

2) To determine the demographic factors that are associated with different spending

behaviours and patterns among young adults.

3) To understand the influence of social media on spending behaviours and patterns among

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 young adults, including how they are influenced by peers and social media influencers.

4) To investigate the impact of environmental factors, such as the influence of peers, family

members, and cultural norms, on spending behaviour among young adults.

e) Hypothesis Formulation:

i) Null hypothesis (H0): Family income and other sources of income of a young adult does

not significant impact his/her spending and buying decisions.

Alternate hypothesis (H1): Family income and other sources of income of a young

adult significantly impacts his/her spending and buying decisions.

ii) Null hypothesis (H0): Television ads and social media promotions by celebrities and

influencers have very less to no impact on the spending and buying behaviour of young

adults.

Alternate hypothesis (H1): Television ads and social media promotions by celebrities

and influencers have a significant impact on the spending and buying behaviour of young

adults.

iii) Null hypothesis (H0): Family and peer groups of an individual do not impact his/her

buying and spending behavior.

Alternate hypothesis (H1): Family and peer groups of an individual significantly

impact his/her buying and spending behaviour.

f) Questionnaire Design:

A survey type study has been designed with an aim to examine the spending behaviour and

pattern of the youth belonging to the cosmopolitan city of Bengaluru. Survey is an

investigation of the opinion and the experiences of individuals or group of people based on

set pattern of questions. The most important ingredient to be found in the survey is the

questionnaire itself. The Questionnaire is inherited research tool to conduct survey for

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 systematic collection of information from different individuals about their behaviour,

preferences, and facts (difference between net, 2011). To gain better understanding, the study

utilized the descriptive method of analysis which is a factfinding study of the subject. It is

concerned with conditions and relationships that relate to the spending patterns and behaviour

of young adults. Further, the information gathered in terms of quantitative values from the

respondents has been organised in various tables for tabular analysis which has been termed

as descriptive method of analysis. It provides an overview of the data regarding the %age

values, mean, standard deviation etc. Descriptive method employed in the study seeks to find

answer to questions through the analysis of the variables and relationships. These include

distribution of responses regarding annual family household income, family socio economic

status, source of finance, monthly expenditure, monthly spending on entertainment, the

preferable activity of entertainment, shopping items, expenditure on eating out, preferred

eating places, movie visits, preference of companion for entertainment, internet usage and

overall perceptual distribution on entertainment etc.

BACKGROUND

Data processing and analysis are important steps in the research process that involve editing,

analysing, and interpreting data gathered from a variety of sources We used the questionnaire

method of data collecting for this research endeavour. The questionnaire was distributed via

Google Forms, and the replies were processed.

1. Editing: To improve the correctness of our data collection, we carried out an outlier analysis

to remove redundant, inconsistent, or incomplete data from the set.

2. Hypothesis Testing: ANOVA was used to construct and test three sets of hypotheses for

reliability, normality, and linear regression. The results of our reliability test, which indicated

that the data we collected is very dependable (0.733).

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 3. Coding: After manually entering the survey data into SPSS, we established a variable for

each question and gave each response a number value or code. We examined the data using

these codes and statistical software.

Statistical tools: Reliability, normality, descriptive statistics, linear regression

METHODOLOGY

a) Data processing:

In order to study the factors influencing spending patterns and behaviours in young adults, we

gathered the data from a representative sample of the population. This was done through

circulating a questionnaire which included the relevant questions and scales regarding the

study.

The questionnaire was filled by 186 respondents throughout the city. Once the data collection

was over, the following steps were taken in order to process, analyse and interpret the data:

i. Data cleaning: Raw data often contains errors, missing values, or outliers that need to be

corrected or removed before analysis can begin. The responses so received were cleaned, i.e.,

responses that were invalid to the study were screened out.

ii. Data entry: The data (responses) were converted into an excel sheet for better visualisation

and analysis.

iii. Data coding: For the purpose of analysing the data, IBM SPSS software was used. The excel

file was imported into the software. In the ‘variable view’ section, the strings were converted

into numerical and options from each question/scale were given a value and a label. To

illustrate,

a. – Strongly disagree

b. – Disagree

c. – Neutral

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 d. – Agree

e. – Strongly Agree

Where, 1, 2, 3, 4, 5 are the values assigned to the scale.

Data view: The data from the ‘data view’ section was also altered according to the labels.

Now, the software was ready to run the analysis.

iv. Statistical analysis: Researchers typically use statistical methods to analyse the data and

identify patterns and relationships between variables. Tests like normality, reliability and

linear regression were done to analyse the data.

v. Interpretation: Once the tests were over, interpretations were made according to the values so

received.

b) Normality and Stationery test:

In SPSS, the normality test is used to check whether a given set of data is normally

distributed or not. The normality test provides statistical evidence about whether the data

follows a normal distribution or not. It can help to determine whether the data meets the

assumptions of many statistical tests that require normality.

The normality test was proved.

c) Reliability test:

Reliability testing is a statistical technique used to assess the consistency or stability of a

measure or scale. The "Reliability Analysis" procedure was used to test the reliability of the

data.

The Alpha is a tool used to assess reliability which compares the amount of covariance

among the items that make up the instrument amount to the overall variance. The Cronbach’s

value was found to be 0.733 which proved the reliability of the data and the study.

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 d) Parametric and non-parametric hypothesis testing:

The use of parametric statistical techniques relies on assumptions about the parameters

(means and standard deviations) and the distribution shape (i.e., assume a normal

distribution) in the underlying population.

Parametric Tests for Hypothesis testing:

• T-test

• Z-test

• ANOVA

The p value obtained in the normality test was more than 0.05.

e) Hypothesis testing using statistical tools:

Linear regression was used to test the hypothesis of the study. Linear regression is a statistical

method that helps to establish a relationship between a dependent variable and one or more

independent variables. The correlation was observed when the p value was less than 0.05, and

the R square value gave the level of correlation.

Pair 1:

1. Null hypothesis (H0): Family income and other sources of income of a young adult does not

significant impact his/her spending and buying decisions.

2. Alternate hypothesis (H1): Family income and other sources of income of a young adult

significantly impacts his/her spending and buying decisions.

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 Null hypothesis is accepted as the significance levels of both the independent variables are

more than 0.05. This suggests that there no to extremely low correlation between Family

status, income, and the spending behaviour of young adults.

Pair 2:

1. Null hypothesis (H0): Television ads and social media promotions by celebrities and

influencers have very less to no impact on the spending and buying behaviour of young

adults.

2. Alternate hypothesis (H1): Television ads and social media promotions by celebritiesand

influencers have a significant impact on the spending and buying behaviour of young adults

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 Null hypothesis is rejected as the p value is less than 0.05. This suggests that there is a strong

relation between TV ads and influencers and the inclination of young adults towards brands,

products, and services. There is 19.4% correlation between the independent and dependent

variables.

Pair 3:

1. Null hypothesis (H0): Family and peer groups of an individual do not impact his/her buying

and spending behaviour.

2. Alternate hypothesis (H1): Family and peer groups of an individual significantly impact

his/her buying and spending behaviour.

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Null hypothesis is rejected as the p value is less than 0.05. This test suggests that there is a

significant connection between the spending patterns of young adults and the kind of people

they stay/go out with (friends/family). There is 34.4% correlation between these variables.

INTERPRETATION

The interpretation of results is based on the following things that were noticed: The study

accepts Null Hypothesis if the P value is more than 0.05 and reject them if the P value is less

than or equal to 0.05. For the first pair, we accepted the null hypothesis since our P-value was

bigger than alpha (0.05).

Regarding the second pair the level of significance for the first hypothesis was more than

0.05, hence, it was accepted while, the level of significance for the other two hypotheses was

less than 0.05, hence rejecting the null hypotheses. It can be concluded that there is a

significant impact of independent variable on dependent variable in the 2nd and the 3rd

hypotheses.

The following interpretations have been made:

 Factors like peer group, family, relationship status, etc have a significant impact on the

buying and spending patterns and behaviours of young adults in the Mumbai metropolitan

region, while some factors like family income and status do not have a significant impact on

the spending habits of young adults.

 A significant number of young adults are brand conscious and are more likely to buy

products and services from brands that are endorsed by their favourite celebrities and

influencers.

 Family income and status do not have a significant impact on the buying decisions and

patterns of young adults.

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 The people with whom an individual stays or goes out with (friends, peers, and parents)

have a significant impact on his/her buying and spending patterns and behaviour.

RECOMMENDATIONS AND SUGGESTIONS

The research aimed to evaluate the factors that affect the spending habits of Young adults in

the city of Mumbai, and certain recommendations can be provided to young adults for

making their spending habits more efficient and make more informed decisions regarding

money. These suggestions include:

1. Financial Literacy Programs: It is evident that many young adults lack sufficient financial

knowledge to make informed spending decisions. To address this issue, this study

recommends the development and implementation of financial literacy programs targeting

young adults in the Mumbai metropolitan region. These programs should cover topics such as

budgeting, saving, investing, and debt management. Government agencies, educational

institutions, and financial institutions can collaborate to offer such programs.

2. Promotion of Savings Culture: Encouraging a culture of saving is essential. Parents,

Professor, Financial institutions and government bodies should promote a culture of saving

money. This can be done by introducing attractive savings products and incentives, such as

tax benefits, for young adults. These incentives can motivate young adults to save and invest

their money rather than spending it impulsively.

3. Social and Peer Influence Campaigns: It is clear that social media personalities have a

significant impact on the financial decisions of young adults, launching awareness campaigns

to inform young adults about the impact of social and peer pressure on their spending choices

is crucial. These campaigns should emphasize the importance of making financial decisions

based on personal goals and values rather than external influence.

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 4. Be Mindful of Peer Pressure: Peer influence can impact spending patterns. It's essential to

make financial decisions based on every individuals own goals and budgets, rather than

trying to keep up with others, and try to maintain a lifestyle beyond their means. The

following are some areas that can be further researched upon:

1. Consumer preferences: The study could investigate the preferences of young adults in India

for different products and services, such as clothing, electronics, food, and entertainment.

This could help businesses tailor their offerings to meet the needs and desires of this

demographic.

2. Digital payments: With the increasing adoption of digital payments in India, it would be

interesting to study how young adults use these payment methods and what factors influence

their adoption and usage.

3. Financial literacy: The study could explore the level of financial literacy among young

adults in India and how it affects their spending patterns and behaviors. It could also

investigate the effectiveness of existing financial education initiatives and identify areas for

improvement.

4. Gender differences: It would be interesting to investigate whether there are any

gender differences in the spending patterns and behaviors of young adults in India

and what factors contribute to these differences.

Overall, there is a lot of potential for further research in this area, and the findings

could provide valuable insights for businesses, policymakers, and financial

institutions looking to engage with young adults in India.

CONCLUSION
This study report has looked into the variables that affect young adults' spending habits. The

results of this study provide significant understanding on the opportunities and difficulties

this demographic group faces in efficiently managing their finances.

25
The study's findings indicate that a variety of demographic, financial, and behavioural

variables, such as family, income, and friends, have an impact on young adults' spending

habits. More specifically, it was discovered that spending behaviour may be significantly

predicted by income, financial literacy, and money views. Young folks are more inclined to

engage in modest spending habits if they have greater incomes and are more financially

literate. Additionally, it was discovered that careful spending habits are linked to favourable

money attitudes.

The qualitative information gathered for this study also provided insight into the opinions and

experiences of young adults regarding their spending habits. The data collected from the

questionnaire showed that young individuals frequently struggle to manage their finances,

whether it's just keeping track of their weekly expenses and balancing multiple financial

obligations. But the qualitative information also emphasised the value of social support and

financial literacy in encouraging prudent spending habits.

The findings of this study have important significance for financial institutions, regulators,

and young people themselves. Policymakers and financial institutions should prioritise

raising financial literacy, offering specialised financial education programmes, and

encouraging positive money attitudes in order to enhance financial stability and resilience

among young adults. For their part, young individuals should seek out financial guidance and

assistance, develop solid social networks, and develop careful spending habits.

Overall, this study has helped us better understand the dependent and independent variables

that affect young adults' purchasing habits. This study can help in the creation of successful

policies and programmes targeted at encouraging financial stability and resilience among

young people by identifying the most important factors of spending behaviour. To better

understand how demographic, economic, and behavioural factors interact to influence

spending during the early stages of adulthood, further research is required

26
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