A

Business Research Method

Project
On
“SPENDING OF YOUNG ADULTS”

Master of Management Studies

Semester 2
(2018 – 2019)

Submitted by
ROHAN SAIVA– 18106B1060

HITESH GUTKA - 18106B1036

PREM BAVASKAR - 18106B1025

Vidyalankar Institute of Technology

Vidyalankar Marg, Wadala (E), Mumbai - 400037

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 Abstract
The spending and savings of youth in India has changed drastically in past few years as a result of
westernization and higher spending power. The studies have shown that youth spends more money on
shopping and especially on branded items. Many studies have been carried out on this topic at international,
global and national level. Similar study has not been carried out in Marathwada region, Maharashtra. This
paper is based on study of different spending patterns among three groups of the students i.e. junior college,
graduation, and post-graduation level students in Mumbai city, Maharashtra. Primary data on spending in
different categories of youth like shopping, movies, fast food, alcohol etc. was collected and analyzed using
various statistical and research tools. T-TEST were used to analyze whether significant difference exists
between spending patterns of different groups and the genders. It was found that students belonging to
different education levels differ significantly in spending in many categories. It was also noted that both the
male and female youth have different spending patterns with a slight similarity. Significant portion of their
spending goes towards shopping, fast food, mobile phone expenditure, investment and transportation. The
youth should cultivate habit of rational spending and should save and invest more in fixed deposits, mutual
funds, gold etc. It is huge opportunity for online advertisers, shopping complexes, retail shops, hotels, fast
food restaurants, mobile phone companies which should tap the youth spending for their benefit.

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 INTRODUCTION

Spending Habits of Youths in India with Special Reference to Mumbai Cityfrom the basic items of food,

clothing, travel and entertainment; the heads such as mobile phone expenses, internet, junk food, liquor

and hobbies, spending on peers etc have also increased. The economy is constantly developing. The basic

factor of economy are saving and spending. The previous generation struck a comfortable balance between

both. But the younger generation seems to lean more on the spending side. Spending habits of the youth in

India have changed a lot in the recent years. The elders invested on assets to ensure that their future will be

secured. But the youth of modern India do not have the same mindset. Young Indians are ready to travel all

over the world to learn more and earn more.

THEORIES

A survey conducted by D. S. Rawat on the buying trend of the youth in Mumbai revealed that the

consumption of branded cosmetics has gone up by about 65 per cent in the past four years to over 58 per

cent of youth said their expenses on cosmetics are 75 per cent. Assocham secretary general D. S. Rawat said

a major reason for the increased spending on cosmetics now was, the increased participation of women in

employment basket. Secondly, he said, massive advertising in both electronic and print media has

influenced the customers and increased their allocation of monthly expenses towards these articles [The

Hindu 2013]

Spending & saving habits of youth in the city of Mumbai with the age group of 14-30 years were

studied. There is a massive difference observed in the spending behaviour of the youth of our country. The

research says that there is a huge influence of a particular age group in the youth below nineteen

years while making purchase decisions. With maturity of age the influence of friends and family

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decreases and independent decision increases. A difference was also observed on the gender wise purchase

behavior and their saving habits. [Dr. RekhaAtri, 2015].

According to the Hindustan Times-MaRS Youth Survey 2015, there is a significant increase in the number

of youngsters who are spending more than what they earn. Chennai youth spends the most on looking good.

More than 22.8% of urban youth spend more than their monthly income. This spendthrift figure is up from

14.5% from the previous year. Mumbai, however, scored well above the rest when it came to most other

categories. 69.5% Mumbaikars said they sometimes purchased unaffordable items.

According to Global youth panel survey, on spending habits of youth all over the world covering the age

group of 14 – 30 years. 43% respondents liked to purchase only after conducting online research 40% were

influenced by family or friends and 17% were influenced by TV/magazine advertisements. [Mobile Behavior,

2008].

According to the NSSO survey, Indians seemed to be spending more on trendy clothes, mobiles and cars.

Major change has been seen in ready-made apparel showing a massive growth as 75% of Indians purchase

ready-made garments. [The Times of India, 2007].

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 RESEARCH OBJECTIVE

From the review of the available literature on the spending and savings habits of the youth a gap was identified

in terms of research carried out to study the spending and saving habits of youth with special reference of the

city of Mumbai. Hence the objective of this research is to:

 Study the segment wise spending habits of the youth.

 Modes of saving practiced by the youth of today.

 Influence factors (Friends , Advertisements).

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 REASONS OF STUDY

We are doing this research because as we wanted to know the spending of young adults it is important to find

out there area of spending as they also contribute towards the economy and also there are not many research

paper written on the spending of young adult.

This paper is an attempt to find out where and how much the youth is spending their money in the city of

Mumbai. Primary data on different spending categories of youth like food, shopping, grooming, movies,

alcohol, and tobacco were collected and analyzed by using various statistical tools and techniques.

Majority of the youth are financially dependent on their parents, there is a huge difference in their spending

habits. It is observed that this class spends money on clothes and accessories and self-grooming. The female

youth spend comparatively more on clothes, accessories, grooming, and gifts but surprisingly save more

money too. Similarly, the professional and postgraduate students spend more money than the other groups.

Friends are the most popular variable that influence purchasing.

It is important to understand the spending habits of a young consumer too for a better understanding of the

economy. This research is an outcome of a survey conducted with special reference to Mumbai youth.

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 RESEARCH METHODOLOGY
Source of Data
Which was collected using questionnaire method. The present study is based on primary data fifty students
of each category i.e. junior, graduated and post graduates were taken thus achieving total population size of
150. Effort was made to include equal number of males and females.
Data Collection
The data was collected using questionnaire in colleges, tuition classes, and college campuses. The questions
included the items on which spending is done frequently by young population like shopping, fast food,
movies, cosmetics, beauty care, mobiles, transportation etc. Both open ended and closed ended questions
were included in the questionnaire to get answers of the objectives laid down in the study.

Sample Unit
The research was conducted in Mumbai city. Three groups i.e. junior college, graduation and Post-
graduation students were studied.
Statistical Tools
• Independent Samples T-Test.

Sample T-Test using IBM SPSS software.

LIMITATIONS
• Sample size of 150 is a limitation; the findings may differ with higher sample size.

• Sample unit and the city can be a limitation as the spending habit may differ in Metro city and semi
urban areas.

• Only educated group is targeted here. The analysis may vary if the uneducated youth i.e. those living
in slum or are poor are considered.

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DATA ANALYSIS AND INTERPRETATION
Gender wise and Education Level wise Spending
As can be seen from Table 1, 45% of money is spent on shopping by junior college students, 31% each
by graduate and post graduate students. It is evident from the data that shopping constitutes the largest portion
of overall spending in youth. Another major part of spending is in the form of fast food which is 13% each
for junior and graduate student and 11% for post graduate students. Girls spend more in beauty care and
cosmetics category; especially post graduating girls spend 11% and 10% on beauty care and cosmetics
respectively. None of the junior and none of the girl consume alcohol and tobacco. However graduation
students spend 8% and 6% on tobacco and alcohol respectively. Post graduate students spend 7% each on
tobacco and alcohol.
Total average spending per month made by junior, graduate and post graduate students is Rs. 2196,
Rs.2652 and Rs. 4920 respectively. It can be inferred from the findings that spending grows with growth in
age. Most of the money is spent in unproductive areas like shopping, beauty care, cosmetics, mobile, fast
food etc. This pattern is also observed in many studies covered under review of literature.

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 Category wise Spending Details

Table 1: Category wise Spending of Students

Junior College Graduation PostGraduation

Girls Boys Overall Girls Boys Overall Girls (%) Boys Overall
Category (%) (%) (%) (%) (%) (%) (%) (%)
Movies 8 8 8 7 7 7 5 4 4
Tobacco 0 0 0 0 8 4 0 7 4
Shopping 41 49 45 32 31 31 39 25 31
Petrol 8 6 7 12 10 12 5 6 6
Alcohol 0 0 0 0 6 3 1 7 4
Investment 20 0 11 5 6 6 5 25 16
Fast food 13 12 13 15 11 13 9 9 9
Mobile 5 13 9 14 15 14 11 11 11
Beauty 2 2 2 6 1 4 11 0 5
Cosmetic 1 2 1 5 2 3 10 2 6
Health Care 1 7 4 4 4 4 5 5 5

Category wise Spending Details

MOVIE
Which All Bollywood Hollywood Marathi Boll/Mar Boll/Holl Don’t
Movie? go
8% 43% 12% 10% 10% 13% 3%
With Whom Alone Family Friends Other
3% 26% 61% 11%
Four
How many Once Twice Thrice Times Don’t go
times
43% 36% 11% 7% 3%
SHOPPING

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 52% 36% 5% 7%
Late No
When? Morning Afternoon Evening
evening preference
3% 11% 64% 7% 15%
MODE OF TRANSPORTATION
Own Public
Mode? Vehicle Transportatio Friend Walking
n
58% 31% 9% 2%
ALCOHOL CONSUMPTION
Consume? Yes No
13% 87%
INVESTMENT
Make? Yes No
20% 80%
No of Post
Junior Graduates
students? Graduates
7 7 16
MOBILE PHONES
Mobile Don’t
Apple Samsung Nokia Micromax Blackberry HTC Other
Company? Have
5% 35% 24% 11% 3% 1% 13% 7%
SmartPhon Don’t
Type of e CDMA Have

74% 20% 6%
Cellphone?
Sim Card Don’t
Prepaid Postpaid
Plan Have
82% 12% 6%
Service Don’t
Airtel Idea Vodafone BSNL DOCOMO Other
Provider Have
25% 26% 23% 9% 7% 4% 6%
FASTFOOD
Post
How much? Junior Graduates
Graduates

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 26% 32% 42%
BEAUTY CARE
Post
How much? Junior Graduates
Graduates
10% 26% 64%
Girls Boys
Share?
89% 11%
COSMETICS
Post
How much? Junior Graduates
Graduates
8% 21% 71%
TOBACCO
Post
How much? Junior Graduates
Graduates
0% 36% 64%

Additional Details about the Spending and Savings of Students

Above table shows the additional details about the spending and savings of students. 43% of
students prefer Bollywood movies; only 10% prefer Marathi movies. Shopping is mostly preferred
in malls and at evening time. 58% students have their own mode for transportation. Only 13%
students consume alcohol. There is less awareness about savings/investment as 80% students don‘t
do any kind of saving/investment. Samsung and Nokia are most preferred smart phones in market.
82% students have prepaid connection with Airtel, Idea and Vodafone as top service providers.
Post graduate students spend 42%, 64%, 71% and 64% in fast food, beauty care, cosmetics and
tobacco category respectively.

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SUGGESTIONS OF THE STUDY
• The youth should think rationally before spending the money and should be more aware
about various savings and investment avenues available in the market.

• Online advertisers should formulate the strategies according to the needs, habits and
behaviour of youth as they form largest portion when it comes to online purchasing.

• It was observed that girls spend more on beauty and cosmetic category; sellers/companies
can make advertisement and promotional plans by keeping this element in mind.

• The expense on tobacco and alcohol was observed in students and specially graduate and
post graduate students. It is advised to refrain from such habits as it can lead to serious
deceased like lung cancer or throat cancer.

• Very negligible expense is made on educational material like books, magazines, newspapers
which should me made in order to enhance the knowledge which will be beneficial to them
in long run.

• It was observed that 65% students prefer to go for shopping in evening. Mall management
can have more employees in evening than in afternoon or morning so that they save on extra
effort made in non-rush hour time; it can also make special discount offers when there is less
turnaround to boost sales.

• It was observed in the study that only 20% students go for savings or investment so it is
suggested that the habit of savings and investment should be imbibed from the very
beginning of educational journey i.e. Junior college. The students should get themselves
literate about importance of savings and investment; they should learn various kinds of
investment options and plan the investment accordingly. This habit of investment and saving
will help them plan better investment in times to come.

SCOPE FOR FURTHER RESEARCH

The study and finding observed therein consider 150 students in three different educational
categories. The sample size can be expanded and the study can be expanded to different cities
including metro city, tier II and III cities. Also a study can be carried out for those students who
have got employment because the spending pattern may be drastically different for a youth which
earns money. It can be further studied whether spending habits change after getting
job/employment. Spending and savings habit of adults i.e. above 30 years of age is also an
interesting area for study. It may be significantly different from youth.

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13
APPENDICES

Questionnaire

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 CONCLUSION

The research clearly shows how students in Mumbai city spend in various categories. Total average
spending per month made by junior, graduate and post graduate students is Rs. 2196, Rs.2652 and
Rs. 4920 respectively. There are significant differences in spending of junior, graduate and post
graduate students in 8 out of 11 spending categories. There are no gender wise significant
differences in 7 out of 11 spending categories. Youth spend large portion of their money on
shopping, fast food and mobiles. Low level of awareness was seen as far as savings or investment
is concern. Girls do not spend at all on alcohol or tobacco whereas spend more in case of cosmetics,
beauty care and shopping. None of the boys in junior college invest/save money and believes in
spending money on shopping, eating out etc.

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