Spending Habits of Young People in
Kerala: A Simple Breakdown
How Spending has Changed in Kerala
Over the past few years, the way people in
Kerala spend money has changed a lot. With more money coming in from family
members working abroad, and with cities growing and the world becoming more
connected, people are now spending more on things like electronics, travel,
entertainment, and health instead of just food.
The average monthly spending per person
has gone up. It's now around ₹6,600 in rural areas and ₹7,800 in cities. The
difference in spending between rural and urban areas is also getting smaller.
What Young People Are Spending Money
On
A recent study from Kochi in 2024 looked
at the spending habits of young adults:
- 70%
spend most of their money on food.
- 66%
spend money on healthcare.
- 62%
spend on entertainment.
Interestingly, about one-third of these
young people save over 30% of their income. However, most of them prefer
simple savings accounts over investing in things like stocks or real estate.
Across India, young people also spend a
lot on clothes, accessories, and grooming. This is especially true for young
women, who also tend to save more.
The Pressure to Spend
Many young people feel pressure to spend
money to keep up with their friends. This often leads them to buy expensive
things like branded clothes, fancy phones, and even cars, sometimes with their
parents' help.
Social media
makes this even harder. Seeing what others have can make students feel
pressured to spend more or even borrow money just to fit in. As one person put
it, "Credit cards are easy to get, and young people use them to buy what
they want."
Debt and Borrowing
Kerala has one of the highest levels of
household debt in India. About 61% of families are in debt, with each
family owing an average of nearly ₹2 lakh.
It’s now much easier to borrow money
through new financial apps, private companies, and gold loans. This has led
many people to take on more debt than they can handle. An economics professor
noted that even in rural areas, people are getting into a cycle of debt by
using their land as collateral.
Nationally, people are also borrowing more
and saving less. The amount of money households are saving has dropped to a
nearly 50-year low.
The Rise of Digital Spending
Young people in India are increasingly
using services like "Buy Now, Pay Later" (BNPL) and credit apps. They
find these easier to use than traditional credit cards. These tools are often
used for quick, unplanned purchases and fun splurges.
Studies have also shown that using digital
payments like UPI can make people spend more without even realizing it.
A study found that 75% of people felt less "guilty" about spending
when they paid digitally, which led them to spend more overall.
Finding a Balance: Saving vs. Living
in the Moment
It’s not all bad news! Many young people
are being smart with their money. In Kochi, nearly 43% start investing
between ages 22 and 25, and about 34% regularly save a good portion of
their income.
However, the "YOLO" (You Only
Live Once) mindset is also popular. This encourages spending on fun experiences
like travel, dining, and entertainment, sometimes at the expense of saving for
the future.
Final Thoughts
Young people in Kerala are facing a
choice: they have big dreams and a strong desire to spend on their lifestyle,
but they also have easy access to credit. While many are being smart about
their money and saving early, others are getting caught in a cycle of
consumerism and debt.
Learning about money, spending mindfully,
and planning for the long term will be crucial. By combining Kerala's
traditional habit of careful saving with the fun of modern life, the younger
generation can build a happy present and a safe future.
Dr. Prasanth P. V.
Assistant Professor of Economics,
Al Shifa College of Arts and Science, Keezhattur, Perinthalmanna.
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