Categorising the money management behaviour of young consumers

Abstract

PurposeYoung consumers represent a significant purchasing group, but little is known about how they make money management decisions. This study aims to identify and classify different approaches to money management that may impact purchasing behaviour.Design/methodology/approachData from focus groups with 40 respondents between 18 and 24 years were recruited via campus notices across three campuses in a university in Melbourne, Australia.FindingsBased on how respondents accommodated economic, social and psychological influences in their money management approach, the authors identified three distinct approaches to money management: conservative money managers, creative money managers and entrepreneurial money managers.Research limitations/implicationsThe study is based on a small sample consisting of 40 individuals in Australia.Practical implicationsYoung consumers share common traits as a group but have diverse attitudes and approaches to money management. The authors identify three distinct approaches to money management based on respondents’ management of factors affecting their money management. Companies must consider these differences to effectively approach millennial consumers.Social implicationsThe indebtedness of young consumers is a common concern in society. Analysis of their approaches to money management offers an opportunity for organisations to support responsible individual money usage amongst young consumers.Originality/valueWhile exploratory, the current study is the first to consider how differences in money management behaviour in young generations may impact consumer decision-making.