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futureofromania

Insight of the Day: Young Romanians spend almost half of their income on food and utilities

Findings:

  • Romanian youth (Gen Z and Millennials) spend almost half of their income on food (28%) and utilities (16%).

  • Despite low wages, 12% of income is saved on average, and 6% is invested in various assets.

  • Only 24% have saved more than three months' salary, indicating financial challenges for many.

  • 49% feel their standard of living has improved in the last year, but 72% expect an increase in the cost of living in the next 12 months.

  • Credit cards (42%) and savings accounts (34%) are popular financial products, but a significant number of young people rely on cash or current accounts.

  • A sustainability mindset is prevalent among young Romanians, with 42% prioritizing sustainability.

Key Takeaway: Young Romanians are struggling with rising living costs and limited income but are still prioritizing savings and investments. They also place a higher emphasis on sustainability compared to their regional peers.

Trend: The major trend is the careful financial management of limited resources among young people. Savings and investments are becoming more common despite financial constraints, and sustainability plays an increasingly important role in purchasing decisions.

Consumer Motivation:

  • Financial independence: Young Romanians aim to support themselves and their families.

  • Savings and security: Saving and investing for the future are top priorities.

  • Affordability and sustainability: Consumers are also driven by sustainability, though price constraints influence their choices.

What is Driving the Trend:

  • Economic challenges: Low wages and rising living costs push youth to focus on essential spending and savings.

  • Cultural factors: A growing sustainability ethos among younger generations drives their purchasing behavior.

Target Consumers:

  • Romanian youth (aged 18-35) from Generation Z and Millennials. These consumers face financial pressures and prioritize affordability, financial security, and sustainability.

Product/Service Focus: The study focuses on financial behaviors of young Romanians, including spending patterns on essentials (food, utilities) and financial products like savings accounts and credit cards.

Conclusions: Young Romanians are managing tight budgets while striving to save and invest. Many rely on basic financial products like savings accounts and credit cards, but significant numbers struggle to set aside more than one month's income. Sustainability is also a notable concern for this group.

Implications for Brands:

  • Value-driven products: Brands should offer affordable, high-value products that align with financial constraints and sustainability concerns.

  • Financial education: There is an opportunity for brands to support financial literacy initiatives.

  • Green marketing: Highlighting sustainability in product offerings can resonate with this demographic.

Implications for Society:

  • Financial insecurity: Many young Romanians face financial challenges, leading to delays in major life decisions and a reliance on basic financial products.

  • Sustainability consciousness: A more sustainability-conscious generation could influence broader societal shifts toward greener practices.

Implications for Consumers:

  • Strained finances: Many young people must prioritize spending on essentials and may struggle to save significantly.

  • Future planning: With growing concerns about the cost of living, consumers are motivated to save and invest more actively.

Implications for the Future:

  • Financial strategies: As living costs rise, youth may become more resourceful with their finances, leading to more savings, investments, and financial innovations.

  • Sustainability focus: Sustainability may become even more central to consumer decisions as younger generations demand more eco-friendly products.

Consumer Trend:

  • Budget-conscious spending on essentials, savings, and investments despite financial pressures.

Consumer Sub-Trend:

  • Sustainability-minded decisions, with many young people prioritizing eco-friendly products when possible.

Big Social Trend:

  • Economic inequality: Low wages and high costs of living affect the ability of younger generations to save and invest in their future.

Local Trend:

  • Romania's youth are grappling with economic challenges, focusing their spending on food, utilities, and savings, while showing a strong interest in sustainability.

Worldwide Social Trend:

  • Young generations globally are increasingly focusing on financial prudence and sustainability, as economic challenges persist across many regions.

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