Chapter 1

INTRODUCTION

Rationale

In global perspective, uncontrolled spending behavior of the younger generations in

Malaysia is becoming more common. Compared to previous generations, they tend to

place a lower value on money when it comes to spending. Esmail Alekam et al. (2018)

found that due to the significant increase in the cost of living in Malaysia, younger

generations like to spend their money lavishly, which has led to changes in lifestyle and

spending behavior in Malaysia. According to AsiaNews.it (2018), one of the most

pressing concerns of Malaysians today is the spending habits of university students,

which has led to an increase in bankruptcies and social difficulties among the younger

generation, often related to their financial capabilities.

Spending habits

The spending habits of young adults are a growing topic in the realm of financial

management. Under Henry, Weber, & Yarbrough (2019; Parotta & Johnson, 2018),

these people are making more sophisticated financial decisions and are setting up

financial management procedures. Young people's spending habits will affect their

financial situation soon (Bona et al., 2018). Early adoption of spending habits would

provide them the best chance to complete their education and learn money
management skills for the future. According to Bona (2018), keeping track of one's

money prevents overspending, impulsive purchasing, and paying too much for items.

The students' spending habits might have a wide range of effects on their lives,

including their relationships with their family, friends, and even strangers. Someone

could feel these effects not only in terms of their financial well-being.

RRL SPENDING

Family

members play a significant role in determining what items to purchase and employ. The

way of life of a person has an impact on their shopping preferences. We frequently

observe and model our parents and other family members' spending habits (Tuliao,

2019). According to the social learning theory, People acquire spending habits from

their parents and other prominent people (Fullen, 2018). Each child's particular financial

experiences influence their parents' financial management and the lessons they teach

their children. Parents significantly influence the development of children. Their parents'

spending habits affect their children's positive and negative spending habits (Hadrik &

Hotirak, 2018). Socialization agents, such as family and peer groups, impact people's

attitudes toward money (Hadrik & Hotirak, 2018)

Spending habits..

It is impossible to separate peoples' spending patterns from their daily lives

because of the swift evolution of the fiercely competitive global corporate environment.

As a result, decision-making has grown more difficult (Stym, 2020). Because of their

exposure to marketing initiatives, internet service providers, and electronic buying

options, students are affected by this problem (Stym, 2020). A pattern of behavior

known as terrible spending habits involves an inability to control ongoing expenses. The

social learning hypothesis postulates people learn spending habits from their parents

and other influential people (Luelle, 2018). According to Ollau et al. (2020), a young

adult's purchasing habits significantly impact how long their financial resources will last.

Instead of investing in long-term financial plans, young people spend their money

quickly on consumables (Decena & Abellanosa, 2022). Institutions should promote and

encourage increased student financial literacy. In contrast to indulgences like food,

clothing, and other items, financially wise, students frequently devote more of their

budget to durable goods like housing, education, and investments (Frun et al., 2019).