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NextGen Magazine

 
 

Study: Peer Spending Habits Affect Our Own

By:
Chris Gaetano
Published Date:
Mar 12, 2019
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A recent study has found that, when it comes to spending, we generally don't want to be too different from our peers, and spending can go down or up, depending on what those around us do, according to the Wall Street Journal. The researchers—professors from the University of Maryland, the University of Chicago and Boston College—used data from a financial tracking app called Status, which can analyze users based on many different metrics, such as age, and show how someone's spending behavior differs from the group. The researchers found that within about two months of using the app, people who found that they spent more than their peers cut spending by about 3 percent, usually discretionary purchases like meals out or travel. Conversely, if people found they spent less than their peers, they would spend more, though only about 1 percent higher on average. 

The study's authors suggest that we could improve overall financial literacy by having more peer comparisons that let people know whether they're over- or underspending what's normal for their group.