Spending their way to adulthood: consumption outside the nest
The Authors
Sarah Penman, University of Otago, Dunedin, Otago, New Zealand
Lisa S. McNeill, University of Otago, Dunedin, Otago, New Zealand
Acknowledgements
Received November 2007Revised June 2008Accepted June 2008
Abstract
Purpose – The purpose of this paper is to explore consumption habits of the young adult market, as they leave home and enter into a world of personal fiscal responsibility. Prior research in this area is limited; however those studies, which have focused on young adult consumption have found increasing impulsive consumption and use of credit amongst this generation. This study seeks to extend research in this area by exploring further how young consumers are spending, their motivations for impulsive consumption choices and their attitudes towards debt.
Design/methodology/approach – The study in the paper is exploratory, and takes a qualitative approach to data collection and analysis. A two-stage design is employed, consisting of focus groups with first and second-year university students and in-depth interviews with selected cases from these focus groups. The data collected are content-analysed, with an emphasis on enlightening quotation from participants.
Findings – The paper finds that the young consumers studied show a relaxed attitude to debt and consumer purchasing, with non-essential consumption seen as “deserved” and a “reward” for behaviour such as studying or working. Social pressure is found to be the key driver of consumption choices in this group, with the majority of spending decisions made impulsively.
Practical implications – The paper considers the influence of peers and society pressures as a whole in encouraging young adults develop particular consumption habits and attitudes to money and debt. It highlights key aspects of the “culture of consumption” that young consumers are part of today and indicates an attitude to debt that is quite different to generations before.
Originality/value – The paper shows that where consumption habits are the focus of numerous consumer behaviour studies, far fewer studies concentrate on how these consumption habits are developed. The study adds to existing knowledge on the development of consumption norms by considering the practises of the youth market as they leave home and begin making purchasing decisions away from parental influence.
Article Type:
Research paper
Keyword(s):
Consumption; Youth; Consumer behaviour; Young adults; Lifestyles.
Journal:
Young Consumers
Volume:
9
Number:
3
Year:
2008
pp:
155-169
Copyright ©
Emerald Group Publishing Limited
ISSN:
1747-3616
Introduction
Prior consumer purchasing studies tell us that individuals are conditioned to consume in a particular way due to the influence of factors such as lifestyle, upbringing and family structure. These factors drive attitudes towards money, materialism, self-esteem and self-control related to non-essential consumption and shed light on motives and rationale behind purchasing decisions (e.g. Rindfleisch et al., 1997). When individuals have recently left the family nest, they are beginning to make purchasing decisions for themselves without the influence of family and the pressures of working life (and its associated responsibilities). Exploring these individual's attitudes towards spending will give insight into how consumption practises are established among the youth market. Focusing on non-essential or personal gratification purchasing furthers this insight as it explores the development of key attitudes towards lifestyle focused consumption and debt. The current paper therefore extends prior consumer purchasing literature by studying the habits and attitudes towards non-essential purchasing of a group of 19-23 year olds, enrolled in full time tertiary study and living away from home.
Prior literature highlights changing consumption patterns and attitudes towards money and debt amongst young consumers; however research into this phenomenon has been fragmented and minimal. The current study aims to address some of the key gaps in current literature by exploring the drivers of and motivation for non-essential consumption behaviour by young adults in the context of attitudes to debt and money in general. The nature of this problem, and its limited consideration in current literature, makes exploratory, qualitative research necessary, in order to better define the psychographic elements that are key to the conceptual development of these issues.
Background
Non-essential consumption
In today's modern marketplace, urges to buy and consume often compete with the practical necessity to delay the immediate gratification that buying provides (Rook, 1987). Impulse buying is said to be made up of non-essential purchasing, outside of those needed to simply “live” (such as food, shelter) and can be directly related to compulsive buying in many situations (Rook, 1987). Although non-essential spending can be a compulsive action, in many cases another cause of unnecessary spending is a lack of self-control. Baumeister (2002) states that temptation is universal and will most likely cause human beings to have impulses. These impulses can be unplanned and spontaneous but will still result in the consumer getting a sudden urge to purchase. The ability to alter one's response to these temptations and impulses is key to the study of consumers’ non-essential buying as the factors and processes that undermine self-control contribute to individuals spending patterns (Baumeister, 2002).
Non-essential spending can be said to follow a spectrum from the compulsive (and therefore unreasoned) to that of the imagined need (and thus reasoned) (refer to Figure 1). The processing that the consumer uses to rationalise the decision is necessarily abstract in the case of compulsive purchasing (along the lines of “I can't help myself” or “I don't know why I bought it”) to appearing rational in the case of the imagined need (“I need new shoes because my current ones don't match my new dress”).
While Baumeister (2002) believes that spontaneous urges and lack of self control can explain all non-essential purchasing behaviours, Rook (1987) posited that things are much more complex. He states that influencing factors such as power and completion, excitement and stimulation, synchronicity, product animation, hedonic elements and inner conflict are present in all impulse purchasing situations (Rook, 1987). The non-essential spending drivers of self-control, money attitudes and self-esteem are thus important to consider in relation to their impact on the potential motives and rationale behind non-essential young adult spending.
Primary non-essential consumption drivers in the young adult market
When investigating non-essential spending and consumption one must distinguish between that of purchasing for the “rush” obtained by the actual purchase process, the desire to obtain the goods for materialisation purposes, or the desire to fulfil an addiction such as the purchase of alcohol or cigarettes. This is important as each situation carries different motivation and rationale and therefore the decision process and feelings associated with that purchase will differ (Faber and O'Guinn, 1988). These motivations are generally categorised as related to self-control, attitudes to money and materialism, and self-esteem or personal image factors.
The ability to alter one's own responses is one of the most important features of the human psyche and is responsible for the huge range and diversity of human behaviour. In consumer behaviour research, self-control most often represents the ability to resist temptations; especially those relevant to impulsive purchase and other expenditures that are likely to be regretted later on. Effective self-control depends on at least three major ingredients; standards, a monitoring process, and the operating capacity to alter ones behaviour. If any of these fail, ones ability to refrain from participating in non-essential impulsive purchasing behaviours can become undermined (Baumeister, 2002). It is interesting in the context of this study to consider the self-control mechanisms of young adults who have recently moved away from the direct influence of parents and family, yet still have limited responsibilities compared to those in the workforce.
Related to self-control is the relationship between the self and attitudes to money and consumption. Hanley and Wilhelm (1992) suggest that our attitudes and feelings about money integrate themselves into our lives and motivate our behaviour at all levels. However, despite the place of money as a prominent force in society and its well-established place as a powerful motivator of behaviour, virtually no empirical research has explored the relationship of money attitudes and consumer behaviour (Hanley and Wilhelm, 1992). Rindfleisch et al. (1997) believe that one's attitude towards money began in their childhood as they observed their parents' behaviour. This attitude remains with them into adulthood and influences all their behaviours concerning money. Some authors posit that attitudes towards money are inextricably linked to concepts of “self-completion”, particularly evident in respect of conspicuous consumption and display of goods (Braun and Wicklund, 1989). Where the authors note that the nature of this self-completion depends on experience and expertise, one could argue that, in the young adult market, attitudes are likely to be artefacts of parental or familial influence and expertise.
Supporting the theory of self-completion is the suggestion that consumers tend to purchase congruent with their self-image or with an image they wish to portray (due to a desire for self-enhancement). Repeated experiences of low self-esteem may result in a cycle of spending on non-essential goods that may become a habitual behaviour (Hanley and Wilhelm, 1992). If initial efforts at maintaining or enhancing self-esteem are successful (such as through peer approval) the behaviour is reinforced. Where young adults are particularly vulnerable to issues of self-esteem, the importance of non-essential goods purchasing may overtake the importance of essential goods and avoidance of debt.
Roberts and Martinez's (1997) study of young Mexican adults and consumer culture found that self-esteem factors could be linked to the fact that a proportionately high number of subjects could be classified as compulsive buyers, with credit card use the predominant feature of this habit. Similarly, Quingwen and Cao's (2006) study of Chinese urban youth suggests that self esteem is a key driver in non-essential purchasing, along with the influence of media and popular culture. The study of Chinese youth also suggests that family pressure has a strong impact on consumption choices, which can be partially explained by the sample (high school age students) still being resident at home. The study of Mexican youth however supports the notion of parental influence, although in reference to parental role models and youth perceptions of parental shopping behaviour rather than direct pressure (Roberts and Martinez, 1997).
Faber and O'Guinn (1988) also state that many non-essential impulsive consumption behaviours go hand in hand with experience of financial hardships, emotional trauma, fear and guilt. For this reason, impulsive consumption, like materialism, can be rooted in early life for many consumers (Rindfleisch et al., 1997). This supports the idea that family experiences shape and mould degrees of materialism and consumption tendencies in later life. For example, it is thought that children who experience disruption in their families appear likely to place greater value on material objects (in an effort to adjust to their new roles) and that children from disrupted homes have a higher tendency to engage in impulsive activities (from substance addictions and criminal behaviour to the much milder impulsive consumption behaviour) (Rindfleisch et al., 1997).
Compulsive consumption
An often cited factor driving non-essential purchasing is that of compulsive behaviour (O'Guinn and Faber, 1989). Rindfleisch et al. (1997) define compulsive consumption as “a response to an uncontrollable drive or desire to obtain, use, or experience a feeling, substance, or activity that leads the individual to respectively engage in behaviour that will cause harm to the individual or others” (p. 314). It has been said that the true motivation of compulsive purchasing lies in the desire to possess generally or the desire to alleviate anxieties or unhappiness (O'Guinn and Faber, 1989). In order to adequately differentiate between compulsivity in consumption and other forms of non-essential purchasing, one must consider the motivations behind this behaviour (O'Guinn and Faber, 1989). Non-essential impulse buying, for example, is conceptualised as a desire for a specific item (Rook, 1987), whereas compulsive buyers indicate that many of them do not have a great deal of interest in the items after they are purchased. This illustrates the key difference between compulsive consumption and general non-essential purchasing (O'Guinn and Faber, 1989) and suggests that compulsive purchasing should be studied separately from attitudes towards non-essential purchasing in general.
Non-essential consumption patterns in the young adult market
It is widely accepted that increases in disposable income, along with better access to credit has encouraged the development of impulse buying into a prevalent consumer activity (Dittmar and Drury, 2000). In the youth market, credit card companies are said to increasingly target university students and their peers, with the majority of these students using credit as a means to support their lifestyle (Bianco and Bosco, 2002). Young adults are said to have difficulty in not only understanding the nature of credit agreements, but in making mature decisions about credit overall (Warwick and Mansfield, 2000). This means that the young adult market can be seen as a particularly vulnerable group in regard to debt use in general (Braunsberger et al., 2004; Rivard, 2002).
The links between availability of funds (Bianco and Bosco, 2002), positive emotion setting and hedonic consumption tendencies (Park et al., 2006) and the propensity of young adults to seek fulfilment through hedonic activities (such as shopping (Kaur and Singh, 2007), and more specifically, fashion buying (Hausman, 2000) have led to increasing patterns of non-essential consumption in this market. Key consumption emotions (gratitude, happiness, guilt, anger, pride and sadness) are said to influence the likelihood of repeat behaviour, but to different extents (Soscia, 2007). Youth consumers who are seeking a hedonic experience, and gain this from the “thrill” of non-essential consumption are likely to seek out the means to repeat this behaviour again and again, regardless of other fiscal responsibilities. Guilt over non-essential purchasing is commonly said to affect consumption trends (Dahl et al., 2003), however it is seen to impact most directly on complaint behaviour and word-of-mouth, but does not necessarily reduce the likelihood of repeat purchasing to the same extent that gratitude, for example, predicts it (Soscia, 2007).
The youth market is said to be both brand loyal and brand conscious, providing entry for firms to them as adult consumers (Marx, 1995). As such, young adult consumers are likely to be more susceptible to the “trading up” phenomenon, where consumers justify spending more on goods that are emotionally meaningful to them (Ko and Sung, 2007), and may be thus more likely to develop spending patterns that reinforce this phenomenon. It is posited that consumption patterns displayed by this cohort are likely to endure into adulthood (Neuborne and Kerwin, 1999), and that this group is, on the whole, highly consumption orientated. These factors make better understanding youth consumption a highly attractive proposition for many parties.
The need for research
The field of research directed toward the understanding of consumption behaviour is immense. Frequently serving as foundation for this research are rational models of behaviour, which assume that consumers have, understand, and use perfect information to maximise satisfaction with consumption of available goods and services. There is, however, relatively little research that focuses on impulsive consumption behaviour (Hanley and Wilhelm, 1992). Those studies that do deal with this issue tend to be focused on compulsive consumption and its damaging effect, with few studies addressing non-essential purchasing outside of compulsive behaviour. The current culture of consumption in the world however is one where materialism is often seen as a measure of success, and is supported by increasingly easy access to credit and debt. This has given rise to a growing trend of non-essential purchasing being the norm amongst younger and younger consumers. Where studies such as that of Boddington and Kemp (1999) suggest that youth purchasing habits are unique, and that the study of these behaviours will give us a better understanding of motives and rationale for participation in non-essential spending later in life, this study seeks to extend the body of knowledge around the drivers, rationales and motivations of young adults towards non-essential purchasing.
Methodology
The methodological approach chosen is emergent rather than tightly prefigured. This is essential to the current study, as it allows the researcher to change and refine questions to best elicit responses from participants (Creswell, 2003). A two-stage approach is used, where each stage of the research informs the other in an inductive process (Gordon and Langmaid, 1988). The first stage of the research is focused on consumer focus groups with the identified market segment (first and second-year university students), followed by depth interviews with interesting cases identified from within this participant pool.
Two focus groups were conducted, with students aged between 18 and 25 years old (the average age range for first and second year university students). Five participants were used for each group, in order to keep the groups small enough to focus on the research issues in depth (Hauge et al., 2004). Participants were recruited randomly by approaching students on Campus at the University of Canterbury (a primary regional New Zealand University) and screening them for suitability to the research (criteria such as age, gender, degree enrolled and whether or not they lived away from home were used to ensure a balance of participants). The aim of the focus group was to establish an understanding of attitudes towards non-essential purchasing and consumption in terms of both psychological and economic aspects. “Essential” and “non-essential” consumption was not pre-defined, with participants developing their own categories in relation to this. The focus groups were conducted early in the second semester of the tertiary year, in July and August.
Six in-depth interviews were conducted with individuals participating in the focus groups. The objective of the interviews was to delve into individual motivations and feelings toward non-essential purchasing behaviour, to understand the reasons behind the participants' recent non-essential purchasing actions and to understand the emotions and rationale that the young adult associates with the action. For this purpose, individuals with focus group responses that were deemed to add to the depth and breadth of the enquiry were chosen. A loose protocol was used for these interviews, designed to explore attitudes and behaviours in relation to non-essential purchasing behaviours. Like the focus groups, in-depth interviews were conducted in the second semester of the tertiary year, in August.
The focus groups and interviews were audio-recorded and transcribed, and along with researcher notes, the data was content analysed using a thematic approach (Stelmer, 2001) to develop categories of response. This method allows representation of key themes emerging from the data, without diluting the value of responses from individual respondents.
Results and discussion
Income sources and perceptions of debt
In order to gauge an impression of experience in fiscal matters, and develop a profile of the sample group, individual interview participants were asked to describe their income sources (prior and currently) and their perceptions of debt. Prior literature tells us that youth spending habits are likely to be heavily influenced by their experience with money, their upbringing and their perceptions of parental role model behaviour (e.g. Roberts and Martinez, 1997, Rindfleisch et al., 1997). Interestingly, all of the participants of this study held part-time jobs prior to leaving home for university, and saw this as their primary source of income, closely followed by parental contributions (refer to Table I). Once established at University, the participants continued to all undertake part-time employment, often seeking out new opportunities for this. Parental contributions also still rated highly, but were surpassed by student loans as an income source. Student loans have appeared as second most important to the respondents in terms of their contribution to individual's income, with the majority of respondents choosing to take out such a loan over the course of their degree. However, some students still try to avoid these loans by working more, and others note that the loan itself (due to its dollar limit) is not sufficient as a primary income source on its own:
So far I haven't had to use the [student loan] option as I work really hard during the week and weekends, as I have been at the same employment for so long I now am on a good hourly wage, but it is still hard sometimes and my parents have to step in and help me out (F).
As [student loans] pay out a maximum of $150 a week students need another source of income if they are living away from home. Me and most of my friends all have part time work; I think that's the norm these days (A).
Student allowances or benefits were also listed, but as access to these are depend on parental income measurement, these are only available to a limited number of students.
Credit was noted as a new source of “income” for students living away from home, and this included the use of credit cards, bank loans and overdrafts. The appearance of this form of “income” gave rise to a line of questioning around participant perceptions of debt:
Debt is not what it used to be, us as students are offered debt at every corner, especially at the start of the year when we are just starting out, even on campus we are approached and offered credit facilities and overdrafts. As many students have never had debt before and are offered so much with little consequences it worries me that we are being taught to live with debt (A).
All participants interviewed perceived some type of debt as necessary to their life, whether or not they agreed with the principle of credit. This is in line with the opinions given in focus groups, where participants agreed that debt is a necessity to the typical New Zealand student, and not generally seen as something of particular concern:
As I said before, my debt is not a major worry at the moment. I don't even look at the statements when I receive them (B).
When interviewees were asked about their personal debt situations, they were surprisingly frank, giving quite specific details regarding what they owed and were (refer to Table II). Overwhelmingly, participants seemed to be able to write off their debt as inconsequential, and as a “means to an end” (such as enabling their study, and therefore their potential for future employment opportunities) rather than something to be avoided in the first place. These findings support prior research which not only posits that credit card companies and the like actively target youth consumers, but also that these consumers are not fiscally savvy enough in this area to use credit wisely or responsibly. Credit is seen as an easy form of access to cash and merchandise, with little emphasis placed on the burden of debt in the future (e.g. Bianco and Bosco, 2002).
Interviewees felt that the changes they had made to their sources of income and use of debt had much to do with changes in the way that their parents responded to them fiscally now that they were living away from home. Where prior to starting university participants felt that their parents funded the majority of their expenses, they perceived a sudden change when this funding stopped or reduced dramatically as soon as they begin tertiary study. While it was not seen as a responsibility of their parents to continue to fund their lifestyle, the sharp change in the income relationship between the interviewees and their parents raises questions as to the link between this and subsequent financial decision making on the part of these individuals.
Perceptions of “essentials”
To adequately investigate the motives and rationale the youth market possesses when consuming non-essential goods, one must first understand how they categorise “essential” goods. The focus group participants were this asked to discuss their perceptions of necessities in terms of consumption in their everyday life (see Table III).
Four key necessities were identified by focus group participants; including housing costs (rent, power, etc.), food, mobile phone costs and transport. There was much discussion around whether or not alcohol should be classed as a necessity good, as it was deemed to form quite a large part of many respondents' lives:
Well considering the majority of my money goes towards alcohol I think that it is a big part of student life and that everyone would agree that it is essential (FG2).
I don't believe that alcohol is a necessity good as it in no way assists your studies at university that that is why we are classed students. I know of many people that do not drink or do not drink in excess, does that mean they are less of students than the rest of us (FG2).
As you progress through your degree drinking etc. becomes less part of your life. I mean when you are first or second year you spend half your time drunk but once you hit fourth or fifth year our drinking definitely slows down (FG2).
This is interesting in itself, as it highlights the personal nature of decisions around “essential” and “non-essential” purchase – for one student alcohol was definitely seen as essential to their way of life, for another, it was in no way part of their essential purchasing. Preliminary findings such as these reinforce the need for exploratory research around drivers of, and attitudes towards, non-essential consumption, as it is not so much the item that is consumed that is worthy of study, but the reasons behind its consumption. A second point of interest to note is the lack of inclusion of study related expenses as a “necessity” (e.g. text books, computer equipment etc.). This deficit was explored further in the focus groups, and the general consensus was that items such as these, that are considered “one-offs” or “yearly” buys were easily forgotten in terms of budgeting or planning consumption. To delve more into this, individual interviewees were asked about their budgeting. The general consensus was that participants did not budget or plan their spending in a formal manner, but were generally aware of what they spent:
I make sure I have enough money in my account to pay rent and my cell phone bill but that's about all (B).
I have a direct debit from my spending to my savings account each week, but I usually end up transferring it back most weeks. As long as there is petrol in my car and enough in my wallet for one night out that's me. I know how much I have each week and generally spend down to my last $5 to $20 (C).
I do plan a little, depending on how many hours I work I immediately take out rent and cell phone. I'm not really in a position to be saving money so I spend the rest in enjoying life (D).
No I don't plan or budget in any way (F).
I record my expenses at the end of every week, I don't plan or budget but do like to know how much I spend and earn each week (A).
I don't really have much choice as my budget is rather loose, its really just my total income minus my rent and cell payments and the rest is just used for spending. Anything left after that would go to savings, although it is very rare to have any left at the end of the week (D).
The one interviewee who did claim to be quite strict in regard to their budgeting did not really do much that was different from other respondents (“I definitely budget, I make sure there is enough money in my account for my direct debits … I take my necessary expenses out of my income as I receive it so I can then use the rest as I desire” (E)), but had a different attitude to the importance of budgeting, with stronger feelings expressed about the importance of the budgeting function overall, something they claim to have learnt from their parents. Interestingly, other interviewees did not note budgeting as learned from examples set by their parents.
Nonessential purchasing
Focus groups participants were asked to discuss their general thoughts on non-essential purchasing. Most of the discussion tended to focus on the concept of impulse versus planned purchasing, with planned purchasing seemingly easier to rationalise and justify than impulse purchasing:
Most of my non-essential purchases are planned. I'm not really an impulsive person. I mean I don't plan them down to very detail but I know what I am looking for when I go out. Like last weekend I wanted a new dress to wear to the “Shapeshifter” gig, so yeah I knew what I was looking for (FG1).
I think that impulsive purchases are not good for a typical student, I mean their actions have consequences and as a student we don't have the means to throw money around like that. If they needed or wanted it, it would have been a planned purchase (FG1).
Participants agreed however, that impulse purchasing was heavily influenced by whether you were shopping alone or with others, with comments such as: “Impulsive purchases generally have a lot to do with influence though. When I am out alone I am much more controlled than when I am shopping with others” (FG1). This supports prior theory, which suggests that susceptibility to peer influence, as related to levels of self-esteem, has a great impact on the way that the youth market consumes generally (e.g. Quingwen and Cao, 2006). In addition, impulse buying was seen as entertainment or a hobby by some participants: I guess then it is a social activity and therefore “fun” (FG1); “If I find something that I love when I am not expecting it I get really excited and feel almost lucky, impulsive shopping for me is a hobby, yeah I'm a shopaholic” (FG2).
To better conceptualise the motivations and rationale for non-essential consumption, the interview participants were asked to discuss their last three buys that could be considered non-essential (refer to Table IV). The students were encouraged to explain the purchasing process, their emotions and feelings during and after the purchase, the reasons behind the purchase and any other associated factors. Reward purchasing tended to figure highly in the explanations, with interviewees noting situations where they just felt that they “deserved” something, that they had a right to “treat” themselves and that they were buying gifts for others, so wanted a “gift” for themselves too.
Other noteworthy explanations for non-essential purchasing included the need to make one feel better, habitual purchasing, purchasing as a gift for another and “needing” something (such as a Coca-Cola or those new jeans). Where guilt over non-essential consumption figured quite highly for some participants (even over items as small as hair accessories, which would be “hidden” until they were “needed”), others seemed to be able to dispel these feelings if the spending was on a gift (even to the extreme of considering underwear for oneself a “gift” for your boyfriend). Noting “guilt” as a feeling associated with non-essential or impulse buying fits with prior research in this area (e.g. Rook, 1987; O'Guinn and Faber, 1989), as does the idea that the guilt emotion does not dissuade the consumer from repeating their actions in the same, or a similar, fashion (Soscia, 2007). This is true of this cohort of respondents, who note feeling guilty in regard to impulsive or non-essential purchase, but do not indicate an intention to change this behaviour in the future (some even admit to repeating the purchase almost immediately).
Interviewees were also encouraged to discuss how they felt prior to each purchase, and after. The most common feeling prior to purchase was that of having to “justify to yourself” the spending you were about to do, followed by a mix of excitement and worry over the purchase (see Table V). Many participants spoke of having “cold feet” prior to the purchase, where they either changed their mind and did not buy, or tried to “talk themselves out of it”. After the purchase the emotions described were much the same mix of justification and excitement, but with added elements of satisfaction and relief, as well as notions of guilt and greed surrounding the purchase:
I think the main negative thing about non-essential purchasing, planned or impulsive, is that of the guilt you feel afterwards. Students are constantly being reminded about their loans and how we are students and should behave like we are living on borrowed money, so yeah, its hard to justify non-essential purchases (FG2).
I just always think what else I could have spent the money on. Don't know if its just me, but I always compare the price to other things like rent, etc. … like if I buy something expensive … that could have been two weeks rent paid (FG1).
The feelings that focus group participants associated with after a non-essential purchase fit with some of the primary consumption emotions posited by Soscia (2007), namely; gratitude (fitting with relief), pride (satisfaction), happiness (joy and excitement) and guilt (guilt and greed). Anger and sadness are not well represented in the categorisations of after-purchase emotions by the focus groups, which may indicate that the consequences of unchecked non-essential purchasing are either not considered, or have not been experienced greatly, by this group. This fits with earlier findings, which showed an apparent lack of care or understanding of the consequences of consumer debt. In addition, these results are interesting in that they also posit a set of pre-purchase emotions for this group of consumers, where justification figures strongly.
The placement of “justification” in relation to non-essential purchasing by interviewees supports the findings of the two focus groups, where much discussion centred on the need to justify consumption to oneself. Focus group participants developed a list of six key justifications for non-essential purchasing, namely:
- The need to be fashionable.
- The need to enjoy oneself/give pleasure.
- The need to reward oneself.
- The need to fit in
- The need for entertainment.
- Access to money.
For each of these justification categories, the focus group participants also developed a set of influencing factors, which drive purchasing choices (see Table V).
Overall, the perceived reasons for non-essential purchasing developed by focus group participants can be classed as generally hedonic in nature (Table VI). Where it is already noted that the youth market has a predominant tendency towards hedonic consumption patterns (e.g. Kaur and Singh, 2007), particular forms of impulse buying, such as fashion-orientated purchasing, can be predicted by a hedonic consumption tendency (Hausman, 2000). These findings thus give weight to the theory that young adults are likely to seek out hedonic experience, and that in the current culture of consumption, this is most often achieved through non-essential spending on goods and services.
Changes in non-essential consumption since leaving home
Interviewees were also asked whether or not they believed their non-essential purchasing had changed since they left home, and to discuss their response to this. The majority of participants believed that their purchasing behaviours had changed since leaving home, with interviewees believing they were far more independent in terms of non-essential consumption decisions now that they were away from their parents' influence. This independence manifested in their consumption in two primary forms – either that they were spending more on individual items: “ I never use to save and would buy smaller less expensive things, but more of them. Now I save up and buy fewer but more expensive, quality items” (E); or that they are more conscious of needing to reserve funds for more practical items: “I am far more independent now and have to pay for a lot of things that I never used to have to such as doctors, medicine and living costs. So I try and make sure I save a little so I am more independent in case of emergency” (D). This is consistent with prior studies which examine the concept of “trading up”, or the development of a willingness to pay a premium for goods perceived as more important to their life at that point in time (Ko and Sung, 2007),
Other interviewees perceived that their purchasing had become more focused, with an emphasis on the practical, such as food and clothing rather than entertainment related goods and services:
Now that I am a student I tend to buy a couple of larger more expensive items rather than lots of little cheaper ones. I also buy more practical things, less on entertainment but far more on food and coffee (B).
University lifestyle and flatting has made my spending change. For example I spend a lot more on alcohol and takeaway food but in saying that I do always go for the cheaper option now, i.e. wine instead of vodka. My priorities have also changed as I used to spend a lot on CD's but now pretty much all of my income goes towards clothing (C).
Participants also discussed the overall impact of their spending changes in relation to these issues, considering whether changes had positive or negative impact in their life. The general feeling was that there were little regrets in terms of non-essential purchasing habits overall: “I generally live for the moment. There is no point in dwelling, what's done is done, even though sometimes it is hard. The tough times have made me who I am today and I'm happy with where I am at” (D); and “I have never found that my purchasing actions have had negative effects on me and so far I have never really regretted a purchase, I mean maybe if I didn't use it, like a CD I don't listen to much” (B).
However, some participants did acknowledge that habits they had formed since becoming more independent in consumption decisions were not necessarily in their best interest long term:
I often transfer money back from my savings to my spending account to buy things that I shouldn't as I don't need them. Overall I think my spending enhances my social life. I don't worry bout how much I am spending while I am out. If it gets really bad sometimes, I can't afford stationary or print credit, so that is not good (C).
I found that I was spending way too much money on clothing. And then like six months later I would be throwing them out after they had only been worn once or twice or even with the tags still on, which made me fell incredibly silly and even guilty. I find that I buy clothes to look “cool” and to fit into whatever trend is in at that time, people judge people by what they wear and group them, so I therefore still dress to what group I want to be in (E).
Sometimes when too much money was spent on socialising it meant the essentials were left out or I would fall into bad eating habits which wasn't great. I guess we are, after all, struggling students and its all in the name of student life (D).
Given that prior literature suggests that spending patterns developed at this age can follow through into adulthood (e.g. Marx, 1995), one might question the extent to which a lifestyle such as that described by respondents (with easy access to credit and little or no consequences to overspending) is going to be maintained in their future? This has important implications for the future of consumption, where non-essential spending becomes more of a focus for individuals than meeting personal health and life-safety needs.
Conclusions
This study has examined the purchase habits of a group of young consumers in regard to non-essential consumption and use of debt. The 18-25 year olds studied showed a relaxed attitude to debt and consumer purchasing, with an emphasis on self-reward and instant gratification. Consumption of disposable goods such as fashion and entertainment items were seen as vital to leading a happy, fulfilled life, and the means by which these goods were accessed was of minor importance. These findings support the theories of prior research into youth markets in general, and extend the notion that young adults are developing consumption attitudes quite removed from those of previous generations, where the emphasis was on saving for the future and acquiring enduring assets.
Overall, the young adults included in this study exhibited a propensity towards large volumes of non-essential purchasing, with a relaxed attitude to spending and debt. The majority of participants saw non-essential purchasing as “deserved” or a “reward”, and felt little need to justify their spending habits beyond this. This would seem to be a growing trend amongst the youth market, where generation Y is said to be the “want it now” generation, regardless of consequences of that mind-set. Increased use of credit and lending services are the norm amongst this generation, but so too, it would seem, is part-time work to earn extra income. The key finding here is the perception of “entitlement” that endures within this group of consumers, where finances are of secondary importance to the pursuit of happiness through consumption.
Social pressure to consume was also an important driver of non-essential consumption for this market, with many items perceived as necessary to “fit in” with particular social groups, or to give confidence at a social event (especially in relation to fashion purchasing). In addition to this, “gifting” was a major reason for non-essential purchasing, with volume and cost of gifts seeming to grow as respondents became more consumption orientated.
Most consumption by respondents was deemed completely impulsive, with no planning and little consideration as to the overall financial impact of the decision. Related to this, was the notion of shopping as “entertainment”, a growing phenomena world-wide as the culture of consumption strengthens. It was particularly interesting to note that there were no explicit differences between the responses of males and females in this study, with both exhibiting similar motivations for non-essential consumption and seemingly both enduring the same pressures to consume.
It would seem then, that the notion of a growing “culture of consumption” is not dwindling, and easy access to lending and credit has fuelled this growth in the young adult market. The importance given to hedonistic experiences such as shopping for non-essential items for oneself remains strong, and is likely to endure in adulthood with these individuals, following a trend worldwide for increased consumption and debt. These findings are of tremendous importance to any understanding of the youth market today, as these attitudes and behaviours will have an enduring effect on the development of future societies in general.
Figure 1Spectrum of non-essential spending drivers
Table IIncome sources in rank order of value
Table IICurrent debt situations
Table IIIPerceived student necessities
Table IVRecent non-essential purchase
Table VFeelings about non-essential purchasing
Table VIPerceived reasons for non-essential purchasing
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About the authors
Sarah Penman is a young consumer herself, and is an Honours student at the University of Otago, Dunedin, New Zealand, Sarah Penman is the corresponding author and can be contacted at: lmcneill@business.otago.ac.nz Dr Lisa McNeill is a Senior Lecturer in Marketing and Consumption Culture at the University of Otago, Dunedin, New Zealand.