Erzsébet Németh,

Budapest Metropolitan University, Hungary

E-mail: enemeth@metroplitan.hu

ORCID: 0000-0003-4427-9827

Anxious spenders: Background factors of financial vulnerability

Boglárka Zsótér,

Corvinus University of Budapest, Hungary

E-mail: boglarka.zsoter@mail.com

Abstract. 1) Background: Financial literacy, its attitudinal and behavioral components are subject to increasing awareness in Hungary, especially after the economical crisis of 2018. 2) Methods: Our study examines the selected aspects of the Hungarian young adults’ behavior, using the data of the survey conducted on a representative sample to compare financial knowledge, attitudes, behaviors and habits of the 18-35 year-olds with the group of older ones. We also analyze what kind can describe the selected groups, and whether clusters can be established. 3) Results: Financial consciousness and setting long-term financial goals are less typical among young adults. They intend to reach their financial aims not by decreasing their costs or saving but rather by preparing action plans or undertaking more work. Three clusters were identified: worried spenders, satisfied risk-takers and careful considerers. 4) Conclusions: Financial vulnerability is specific to the worried spenders, this cluster represents almost a quarter of young adults. They live for today, financial problems make their existence harder, this, in turn, causes depression, they do not dispose savings. Furthermore, when comparing this cluster to the two other clusters, their financial knowledge and skills are of lower level, less of them make a budget, their income is lower and they tend not to set financial goals as such.

Received: November, 2018

1st Revision: January, 2019

Accepted: April, 2019

DOI: 10.14254/2071-789X.2019/12-2/9

JEL Classification: A22

Keywords: financial literacy, financial knowledge, attitudes and behaviors, young adults, financial vulnerability, Hungary