Spending too much money? It may have to do with who you associate with, according to a new study.
Mark Lee, a retail management professor at Ryerson, conducted the study, When Are Frugal Consumers Not Frugal? The Influence of Personal Networks, that found that one of the reasons students are spending so much is because of the influence of their social group. A person is likely to spend more if her or his friends have carefree spending habits. If those friends are more savvy, one’s likely to save.
“Sometimes they (students) do not realize that they are spending more than what they think they can afford,” said Lee. “This is why young people sometimes fall into the trap of credit card debt. Having knowledge to better save and who we spend with can help.”
Three separate studies were conducted with different undergraduate students in Canada. The studies looked at students’ spending habits, the connection of friendships in social networks, and how frugal shoppers would spend their money. The results showed that someone who identifies as a frugal shopper is more likely to spend more when going out shopping or dining with high spenders.
Cassie Hooper, a fourth-year retail management student, admits to overspending on a lot of the newest trends and styles. However, Hooper knows it would be better if she were more frugal with her spending.
“Before we know it, we’re going to have to start paying back the debt we put ourselves into to attend school, and we may wish we hadn’t bought that $400 pair of sneakers,” she said.
Diandra Urech is also a fourth–year retail management student, and thinks that students could benefit from financial education to assist in spending habits.
“It isn’t something that is really taught in high school unless you take accounting or personal finance classes,” said Urech. “I also find university students very impulsive/emotional shoppers, so they are more apt to spend on a whim then actually plan it through.”
Although there isn’t definite way to preventing overspending, Lee says that being more conscious with spending habits and who you’re shopping with can help you save your coin.