Journal of critical reviews 718 Journal of Critical Reviews ISSN- 2394-5125 Vol 7, Issue 2, 2020 Review Article SAVING AND SPENDING HABITS OF YOUTH IN SULTANATE OF OMAN Kavita Chavali College of Commerce and Business Administration, Dhofar University, Sultanate of Oman kchavali@du.edu.om Received: 21.11.2019 Revised: 16.12.2019 Accepted: 23.01.2020 Abstract The study aims to investigate with the saving and spending habits of youth in Sultanate of Oman. Youth are an influential group by virtue of their numbers in the total population, purchasing power, high levels of leisure time and exposure to abundance of information because of the advent of technology. The objective of the study is to study the saving and spending habits of youth and the variables which have an impact on it. The extent of peer influence, parental influence and financial literacy on the saving and spending habits of youth in Sultanate of Oman are investigated. The adopted method for this study is a survey design based on collection of data, through a structured questionnaire from randomly selected youth. Descriptive Analysis and Correlation results revealed that influence of peers, influence of parents and financial literacy of youth are significantly correlated with the saving and spending habits of youth. Keywords: Saving, Spending, youth, peer, parental influence, financial literacy. © 2019 by Advance Scientific Research. This is an open-access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/) DOI: http://dx.doi.org/10.31838/jcr.07.02.132 INTRODUCTION The study investigates the saving and spending pattern of youth in Oman. It also examines the influence of peers, parents and financial literacy of self on the saving and spending behavior of youth. Youth fall in the age group of 19-25 years i.,e individuals who are born in the age bracket of 1994-2000. According to the statistics of World Bank and United Nations two-thirds of the population in the Middle East are below the age of 25. Youth are an important group by virtue of their numbers, purchasing power, relatively high levels of leisure time. They have access to abundance of information because of advent of technology. Youth have a significance influence and demand for various products and play an important role in consumption as they do not have any basic financial commitments like paying rent, bills and have enough purchasing power. The spending habits vary from person to person. Youth involves in conspicuous consumption regardless of the source of funds. They have no or limited experience in saving and spending as they learn to live within their means. Individuals below the age of 30 years have high rate of debt because of their limited experience with finances and managing money (Kim et.,al ,2016). Saving is presented as the portion of the income that has not been spent on consumption. Saving is defined as a part of the individual income while maintaining some part for the future when needed. Saving and spending is dependent on the ability and the willingness to save or spend (Katona, 1975). Saving and spending is dependent on disposable income and financial expectations and attitudes. People who saved and had savings, though have debts, felt more optimistic and in control of their lives than those who had debts but no savings (Furnham, 1997). According to Tuvesson and Yu (2011) youth saves because their parents wants them to save and the sense of pride they achieve out of it. Lunt & Livingstone (1993) examined the relationship between saving and borrowing. Habitual or regular savers were found to have different psychological motivations from borrowers, seeing debt either as a failure or as a normal part of everyday life. The results showed that savings and borrowing are independent behaviors. There is abundance of research done on saving and spending habits of adults but there is very little research on saving particularly among youth and adolescents (Furnham,1999; Webley et al., 1991). This study understands the saving and spending pattern of youth and studies the effect of peers, parental influence and financial literacy on the saving and spending habits of youth in Sultanate of Oman. LITERATURE REVIEW Salikin et al., (2012) in their study seek to determinate the effect of the background of parents on savings attitude on students in a Malaysian local university. The findings of the paper indicated that the higher the educational background of parents, the less likely their children tend to money saving and higher the income parents, the less likely their children tend to put their money for saving. Alwi, Amir & Ali (2015) aims to study the factors influencing savings habits of millennial in Malaysia. This study focused on a group of students among business school with various degree programs to determinate the principal factors effecting savings attitude. The results of the study showed that lack of financial knowledge can affect financial behavior negatively which can later affect their financial well-being. Cummins et al., (2009) seeks to investigate with the financial attitudes and spending habits of students among freshmen college. The results of this study showed that college students may not be ready to handle with the financial situations faced by them and youth have no planning for their expenses. Furnham (1999) in his study focused on the saving and spending habits of children. Findings showed that over 80 percent of the respondents indicated that their parents do not give them extra money. Results showed also that there is a significant correlation between gender and the amount of money to spend while males spend more than females. Leiser & Ganin (1996) studied the impact of parental influence on saving and spending of children. They have distinguished parents into two categories. First category of parents avoid talking about financial matters and important purchases in front of their children. They do not involve the adolescents in financial matters. Second are those parents who act on the assumption that children need to be trained to be economically independent in the future. In the second case they believe that the child will learn the value of money and get motivated to save. Ranjith (2002) study revealed that the increase in age leads to increase in tendency to save and decrease in risk taking attitude.