Beruflich Dokumente
Kultur Dokumente
Alexis Wilhoite
Professor Moore
English 1302-Hon
18 April 2017
It is no secret that people like to shop and can get addicted to shopping, but sometimes
people go overboard on the amount of money that they spend while shopping. Mainly focusing
on the younger generation(s) in the United States and the fact that they are overspending and
wasting money on useless things that they may want but do not necessarily need is what is
helping send the United States into bankruptcy. In 2004, students owed, on average, $2,900 on
credit cards whereas in 2009 this figure soared by 78% to $4,100. Moreover, young consumers
account for the second largest rate of bankruptcy in the United States (Sotiropoulos, Veneta).
This younger generation is putting themselves into credit card debt, falling into a financial black
hole, and losing money because they do not know how to budget or save money. By placing
required financial literacy classes in schools, the overspending problem at hand will decrease and
these consumers will be able to handle their finances much better than before.
Young consumers these days have problems with recognizing a good deal or sale. They
see a sign or ad promoting a certain percentage off an item or they see signs that say spend x
amount of money and get x amount off the total price. All these are doing are making the
companies some kind of profit and taking money away from the consumers, thus in turn making
them spend more money. Taking a look at the term consumer psychology will allow for a better
understanding of why the majority is overspending. Consumer psychology is the study of the
processes involved when individuals or groups select, purchase, use, or dispose of products,
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services, ideas, or experiences to satisfy needs and desires.(Solomon). There are five stages in
the decision making process. These stages make consumers act in the way that they do when
making a decision. What is shown below in Fig.1 is the five stages of the consumer decision
making process.
(Solomon) Fig.1
Need recognition is the first stage in the decision buying process and is defined as The
consumer experiences a significant difference between his or her current state of affairs and
some desired state. Once a need has been activated, there is a state of tension that drives the
This stage can be considered utilitarian or even be considered hedonic, and that easily
leads the consumer into the second stage which is the information search stage. In this stage, a
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consumer has already activated their need, is actively searching for a way to eliminate or reduce
it, and at this point has a one track mind about the product or service that they want to fill their
needs or desires. A poor decision on the consumers part or once they run into the realization of
how expensive a product is can eventually contribute to causing negative effects on the
consumer. These negative effects can send the consumers into a downward spiral and send them
straight into the third stage, which happens to be Evaluation of Alternatives. During this third
stage the consumer is attempting to narrow down their options to find the cheapest price for the
They want the best deal, the cheapest price, and they wont settle until that desire for the
lowest price item is fulfilled. Once they find the product they are looking for and at the price
they desire, they step into one of the most important stages in this five stage process, the
purchase stage. The purchase stage is the most important stage because the consumer is buying
the product and this just happens to be where the overspending happens. Sometimes they do not
even realize that they spent that much money when they do spend it or sometimes they just do
not care and spend money even if they do not have it because they think they can.
This, in turn, leads to the fifth and final stage the post purchase evaluation. In The post
purchase evaluation stage there is a term that researchers use called CS/D. Consumer
satisfaction/dissatisfaction (CS/D) refers to the attitude that a person has about a product after it
has been purchased. This attitude, in turn, is an important determinant of whether the item will be
Figure 1 above showed the consumer buying process, and according to author Cara
Baruzzi, between 2 and 8 percent of Americans suffer from "compulsive buying disorder,"
overspending at the mall, online stores and elsewhere, according to the National Endowment for
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Financial Education. The disorder "basically is a preoccupation with shopping for unneeded
items and the inability to resist purchasing such items (Baruzzi). Compulsive buying disorder is
a serious problem and it is part of the reason why college students and young adults are
overspending. One way to help curb this disorder is for them to take a financial literacy class to
help them better understand the importance of creating a budget and saving money.
The majority of young consumers do not know how to make a budget and without having
a budget, they do not know how to save money and know if they even have enough money to
spend it on the things that they want, but may not always and necessarily need.
The young consumers are also misusing credit cards as a way of compulsive buying. By
having a credit card or multiple credit cards, these young consumers think they can just swipe
their card, spend money, and tend not to worry very much about the consequences that follow,
such as credit card debt, financial blunders, and a continuous compulsive buying behavior.
College students are a very attractive credit card market because there is a continual influx of
potential credit card owners into this age group every year who may develop into lifelong users
(Palan,Kay).
The reason this age group is considered a target is because they are new adults and have
no concept of saving money and do not know anything regarding a budget. Most of their money
at this young age is going to spending money on credit cards, applying and paying for student
loans that they have acquired or are still acquiring during their time in college.
A huge percentage of students in college have credit cards as well, and according to Kay
Palan 84 percent of undergraduates have at least one credit card and the average student has 4.6
cards. In the minds of college students, credit cards are associated with spending.
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When college students were exposed to a credit card logo when evaluating a product,
they were more likely to quickly decide to purchase, to make the purchase, and to spend more
than students who were not exposed to a credit card logo (Palan, Kay). All these young
consumers know how to do is to spend money because that is all they know and are exposed to.
Since this is all these young consumers know, statistics are pretty high when these
consumers are involved in spending money and since they own so many credit cards, an article
by Veneta Sotiropoulos shows that these statistics play a part in the cause of why and how they
are out of control with spending money and misusing credit cards.
In 2004, students owed, on average, $2,900 on credit cards whereas in 2009 this figure
soared by 78% to $4,100. Moreover, young consumers account for the second largest rate of
bankruptcy in the United States (Sotiropoulos, Veneta). With these consumers being the second
largest rate of bankruptcy, this means that there is significant problem with that is in dire need of
a solution time.
Required financial literacy classes put in place for high school sophomores and juniors
will help to fix a portion of the problem, but it will not fix the problem as a whole completely. By
having these students take this class at this age and time of their life will help them to graduate
with life skills that they will need to be an adult and to be able to provide for themselves and for
them to be able to function in the world once they are out of school and on their own. These
classes will teach the students how to make a budget, how to balance a checkbook or bank
account, the pros and cons of owning a credit card, the cost of living whether it be a dorm in
college, an apartment, or at home with their parents, and the class will give them statistics and
information to help keep these students from being a statistic themselves and to see how
important it really is to learn these life skills that they are being taught. According to the 2014
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survey by the Council for Economic Education (2014), only 17 states require students to take a
personal finance course or that personal finance be included in an economics or civics course as
a high school graduation requirement. Obvious constraints of instruction time and teacher
workload come in the way of integrating financial literacy in the high school curriculum.(Gill)
With only 17 states requiring students to take a class that teaches financial literacy, only a
handful of students are getting the information that they need to survive on their own in the real
world. Its great that 17 states are requiring it, but if we could get the other 33 states on board to
require that these classes be taken, imagine the number of students that would be learning the
importance of creating a budget and being able to make it on their own once they graduate from
The life skills will be with them for the rest of their lives and they can even be a part of
helping fix the problem by teaching others and sharing what they have learned to help even more
young consumers and students learn a little bit of knowledge about finances and why they are so
important to know and learn about. Students financial literacy appears to be on the decline.
High school students who completed a personal finance or similar type of course might be
expected to have greater financial knowledge than those who did not take such courses. (Miller)
since the financial literacy rate seems to be on a decline, it is dire that these classes be put into
place immediately because the faster that these classes are put into place, more students can be
reached and will be able to be financially literate. These classes also need to require an exit exam
prior to the students taking the class to make sure that the knowledge has been retained and the
students can prove that they know what to do once they were to graduate high school. The
United States does not address this topic widely in K12 schooling. Though 43 US states now
include personal finance somewhere in their K12 standards, only six states require student
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testing of these concepts. A problem arises, however, when there are multiple generations of
financially illiterate citizens. (Faulkner) There is a serious problem when only 6 out of 50 states
requiring that the students be tested on the knowledge that they have learned from these classes.
Nothing good can come out of learning something and the student is unable to prove what they
learned because a test is not required for them to show that they learned anything, and thus
making the required financial literacy classes a complete waste of time on everyones behalf and
this then causes problems such as ones where Americans are left in a situation where schools
dont teach financial literacy, parents often cant teach financial literacy, yet most realize, as
famous financial pundit Suze Orman recounts to her readers, You will never truly be powerful
in life until you are powerful with your own money. Someone needs to address financial literacy
education nationwide (Faulkner). Once these classes become available nationwide, the decrease
in financial literacy that is being seen, will eventually rise and thus lower the number of
financially illiterate students that are in school. The more literate students that will arise will
eventually help in aiding the bankruptcy caused by the younger generation to decrease and
hopefully over time disappear completely and restore the national debt that the United States has.
Having financial literacy classes put in place for sophomores and juniors in high school,
they are still young enough to be molded into young adults who are financially literate but yet
not too old where it could be too late for them to have absolutely no knowledge of anything to do
with finances and the real world when they graduate. By having this knowledge, they can go out
into the world without getting lost in it. These classes wont fix the entire problem of
overspending, but it will help fix a small portion which in turn can lead to greater things and
Works Cited
Baruzzi, Cara. "'Compulsive Buyers' Find It Hard to Say No." New Haven Register (CT),
Faulkner, Ashley E. "Financial Literacy Education in the United States." Reference &
User Services Quarterly, vol. 56, no. 2, Winter2016, pp. 116-125. EBSCOhost,
search.ebscohost.com/login.aspx?direct=true&db=tfh&AN=120639793&site=ehost-live.
Curriculum in a High School Economics Class: Implications of Varying the Input Mix from an
Experiment." Journal of Consumer Affairs, vol. 49, no. 2, Summer2015, pp. 472-487.
EBSCOhost,
Variables." Delta Pi Epsilon Journal, vol. 52, no. 3, 01 Sept. 2010, pp. 168-181. EBSCOhost,
search.ebscohost.com/login.aspx?direct=true&db=eric&AN=EJ920683&site=ehost-live.
doi:10.1111/joca.12048.
Palan, Kay M., et al. "Compulsive Buying Behavior in College Students: The Mediating
Role of Credit Card Misuse." Journal of Marketing Theory & Practice, vol. 19, no. 1,
2017.
edited by Charles Donald Spielberger, Elsevier Science & Technology, 1st edition, 2004. Credo
Reference,
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http://search.credoreference.com/content/entry/estappliedpsyc/consumer_psychology/0.
Sotiropoulos, Veneta and Alain D Astous. "Social Networks and Credit Card
Overspending among Young Adult Consumers." Journal of Consumer Affairs, vol. 46, no. 3,
2017.