Different income groups, (upper, middle, and lower class) have different spending patterns for a number of reasons such as the lack or abundance of funds, financial mentality, desire vs. ability to attain luxury. Financial Priority as pertaining to social economical status also plays a large role in motivated spending. There are some who would go on to suggest that the IQ's of those in both the lower and upper bracket are directly related to their social economical status; IE, The less intelligent, the lower the status, etc. Which would, if it where the case, play another large role in specific spending patterns.
People who are rich, have great job and very high wage would spend more than saving. Because they have the enough money to buy the goods now. These people save money in a very low amount, for example a rich person earns $40000 per month, then he save $10000 for future education for his children, the $30000 rest were spent on foods and many tertiary stuff, like a plasma tv, an expensive sofa, jewelry for his wife, gadgets, expensive toys for his children, other ornaments like expensive porcelain, plant pots and aquariums, and pets like ornamental fishes and exotic birds and many more.
People who are not too rich, but not too poor are called middle-class, they would spend and save in equal amount, for example a middle-classed family would have $1000 earnings every month, so they will spend $500, the rest of the money is saved for future use and wants, like education bills for children, university, expensive gadgets and jewelry and many more. They spend the $500 rest for goods which fulfill needs and in the present, like foods, hygiene product, and many more.
People who are considered poor, are called low-class. These people usually have no job (unemployed), or have at least an unskilled job, which are poorly paid/have low wage. These people sometimes are high school graduates, because they can’t support their education bills. They also save more than spend, though for only some who work. They only buy cheap food, cheap hygiene products, and more. These people are very careful on spending something. They only want to buy something cheap and useful for their needs only. They also spend few on wants because they only want to spend money on their urgencies like hunger or hygiene. Even if they would buy toys for their child, they would find ones which are in the traditional market and are cheaply made so they could afford it. They tend to try to save more to support their child’s education, though they usually can’t support them because these category of class usually have many children, usually 4-6 children, and they usually can’t feed all of them and can’t support all of their school bills, so it only works with poor people with few children, because their wages aren’t very high too but they still could at least support their only child’s school bills and made him/her successful in the future.
Based on the spending and earning of money, people classified into three groups, high class societies, middle class societies, and low class societies. In This classification, high class people are someone who earn a high standard of wages and have more money to spend outside the basic needs. Example for high class societies are Director of a company, Manager of a company, Executive (CEO), Government Officials, President, Artists, and Businessmen. And low class people are someone who earn low standard of wages and only have a few money to spend outside the basic needs. The example for low class societies are Maids, Beggars, Drivers, Cleaning service,and scavengers. For the middle class societies, they are people who earn middle level of wages, so, their ability to spend their money are in the middle of high level societies and low level societies. For example, employees, engineers, entrepreneurs, teacher, doctors,and scientists.
By This classification, people has different pattern for what kind of needs they spend the money they have already earned. For the high class society who consider themselves rich and have a lot of money, they have excess money to spend outside the basic need, for example, they can buy car, a luxury house, apartment, gold, jewelry, private helicopter, private yacht, and Villa. The percentage of their spending is higher in other than basic needs. They spend their money in order to seek the pleasure of life.
For middle class societies, they also have excess money from what they have earned. But, not much as the high class societies. So, their excess money they usually spent for something which is support their life. For example, computer, mobile phone, they also probably have a car but not as luxury as the high class societies, household appliances, etc. most people who live in this world are middle class societies. It's only about a few are high class societies. The government policy in order to eliminate poverty, launch the program to increase the middle class societies, because the middle class societies are the foundation of economy of a country.
Low class societies do not have excess money to spend from what they have earned from their job. So, they only can cover basic needs for what they have earned. Basic needs are houses, clothes, and foods. Low class societies consider to be poor people economically. For example, beggar who earn money from other people mercy or sympathy.
For the conclusion, Different pattern of spending determine by various earning of people. People who earn a lot of money whose consider to be rich have large amount of excess money, so they can spend it for their own hobbies or pleasure. Middle class societies also have excess money but not as much as the high class societies. They earn their excess money to support their life and increase their welfare. And for the low class societies, they do not have excess money to spend outside three basic needs (foods, houses and clothes). They do not have money for other needs.
When we analyze, spending pattern is related to the amount of income that we receive, there is different level of income for each group which it determines how much the group will spend. Some people spend higher such as government and success business owner. While others spend lower such as employer, worker, waiters, assistant and helper.
Richer group have high wages or position in their job that enable them to earn much and they are skilled people. In that way, they spend more because people in that group can buy anything to satisfy their want although the cost of the goods is high but it does not matter. One example of the goods is electronic gadgets, electronic gadgets have strong utilization, the firms keep on producing new gadgets such as hand phone, tablet and notebook with more high quality that attract many customers to buy them especially if those gadgets are famous branded. But the disadvantage is that they will need to pay higher taxes due to higher income. They also have high consumer confidence in the future, which means that how the consumer behave, is it changing or the same when they face something like economic problems such as lack of money to buy house, car and educate their children. They earn the highest interest rate among all the level of group because they have high income.
Middle group earn less than the rich group of course, it is because they are less skilled and specialization but it does not mean that they are unemployed. The effect of having less skilled is that they don’t have high position compared to rich group and the spending pattern will be lower; they cannot buy luxury goods like expensive car, shirt, and shoes because their money is limited. In impact, they can only buy cheap or middle price of goods but they still can fulfill their need with lower standard of quality such as simple house, enough money to assume the family. So they can fulfill their need but in satisfying their want, they will have lesser chance to do that.
Low group has the lowest spending pattern; they cannot effort to even fulfill their need because they have no skill and it made them unemployed or employed but low-income, maybe they don’t have a good education when they were young. They depend on other people like government by getting subsidies to help them to fulfill the basic need such as food, shelter, clothes and they have low consumer confidence in future which make their behavior changes. Low group people have low-interest rate because they have lower-income that effect the amount of interest rate they earn for living everyday like paying family cost and surviving later in the future. When people recognize the change of the behavior, it is called trend.
In this the conclusion show us that every people don’t have the same spending pattern, although they are in the same country, age and type of jobs because different companies give a different amount of income.
Each income group have different purchasing power, consumption level of high income groups is high because that income groups earns more income so that can consume more goods and low income people's consumption level is low because that have less income than the worker that works in a high income group so they will choose to save it rather than consume it. They choose to safe it because it will be useful for their future. When a workers income increase and the things costs remains the same, so there will be more demand for that goods and services, which means the consumption will increases and the propensity to save is decreasing. Change in income typically results in a change in demand for goods and services. The actual change in demand that occurs will depend on the specific good or service. Additionally, different individuals will respond differently to changes in their income. Some individuals will tend to save more of their increased income than others, as opposed to spending the increase on goods and services. The propensity to consume is a measurement of a consumer's consumption and savings choices given a particular increase in income. Some individuals will tend to spend a larger proportion of an increase in income than others. Superior goods are goods that a consumer is more likely to demand and consume given an increase in income. Such goods include designer clothing, restaurant meals and electronics. Consumption of these goods will increase depending on both the propensity to consumer of the consumer and the income elasticity of demand of the good or service. Consumption expenditures determinants are ceteris paribus factors that determine the position of the consumption line that plots the induced relation between consumption and income. Changes in these determinants then cause shifts of the consumption line. The idea that consumption depends primarily on wealth is intuitively weak because consumption is aggregated over the population, while wealth is concentrated in a small segment of that population. A person with little or no wealth will spend the next dollar meeting some unsatisfied need, while the person with lots of wealth has the option of devoting it to rent-seeking or accumulation in an off-shore shelter.
The conclusion is each income groups have different consumption because the consumption rate is determine by how much income we receive, if we earn high wages we have 2 choices either u save the remaining or you use all of your wages to buy goods and services.
People with different incomes or assets have different patterns of spending in their needs and wants. Well, rich people spends goods and services that are exclusive or goods and services that are expensive to satisfy their wants. While poor people with less financials usually spends their money to only fulfill their needs, they rarely buy their wants because without the goods they want they still could live, so in conclusion from what i say from above is that the rich people spends their money from needs and wants but in high quality or with more money to be more satisfied with the goods and services ,while the poor people are mostly only spending for their needs because they have no enough money to buy the wants while needing to buy their needs, and they could only buy needs that are not that good or cheaper because they need to save some money or they need to buy more goods and services. The poor people spends goods and services not to satisfy their wants but to just fulfill their needs or to just buy goods and services that is enough for them to live.
Another factor of different spending pattern is because of age. The young people have different spending patterns than the older people because older and younger people have different needs and wants. Most young people would spend more rather than saving because they are still in the youth or still liking to buy goods and services, while in the opposite side from the young people, older people or people that are already married will spend less and save more, why?, because the older people needs to save for their future or for their families fund like electricity bills,school,house,clothes,foods,and more. There are some examples of the difference spending like when the young people would like to buy new or trending gadgets even tough it is expensive, while most of the older people are not interested or would not buy new gadgets but will still use the old gadgets and save the money for importance, such as paying college or school bills. In conclusion is that people with different age do have different spending patterns.
There are also difference in spending patterns because of different gender from male and female. Male people usually are interested and craving for sports equipment or new gadgets that are in the trends. While most female are interested and likes to buy cosmetics or beauty equipment,shoes,and clothes. From what i analyze is that most woman spends or shops goods and services more than male, but once a male spends for goods and services it will cost more but most male would only spend only sometimes or that females spends more often. In conclusion that different patterns of spending could also be affected by gender of a person.
The spending pattern could also be affected by the interest rate given by the bank. Because when people receive their wages or income they would prefer spending them on goods and services if the bank interest rate is less or low. By having a higher interest rate in bank people would be more attracted to save their money but if the interest rate is low they would be more attracted to spend their money on buying goods and services. In conclusion is that interest rate could affect the spending pattern because of attraction to buy goods and services.
There are 3 group of income class (high, middle, and lower class). High income class are usually skilled worker which are educated and have special knowledge and abilities. They also perform high level of task and has higher demand than supply which make them pay more. For example soldier, CEO, and teacher. Middle income class are the semi-skilled worker. Lower income class are the unskilled worker which are not educated and has lower level of task and also less knowledge and abilities.
High income class are the worker which can fulfill their primary needs like shelter, food, and clothes as well as their luxury thing like a expensive big house, sport car, jewelry and have foreign holidays. They have higher expenditure in luxury needs because primary needs which have to be fulfill are cost cheaper than the luxury things.
Middle income class are the worker which are pay less than the high income class, but they can still fulfill their primary needs as well as some least expensive things like motorcycle, smartphone, TV.
Lower income class are the worker which are pay the lowest because they are less educated and has less knowledge and ability. They feel difficult even to fulfill their basic needs and they can't try the expensive items because it's already hard to fulfill their basic needs in order to them to survive. Lower income class for example a beggar.
The conclusion is expenditure of a person differ with the real income and the wants and needs of a person.
People buy goods and service to satisfy their wants and needs. The abilities to buy goods and service depend from their income. Income in question is disposable income. Disposable income is the net income people give after reduced income tax. The higher disposable income, the spending will be varieties. This cause people that have higher disposable income can buy anything, the goods and service that they bought was luxury item. In other case, poor people must spend all of their income to buy the basic needs like food, shelter, cloth and if possible to satisfy few wants from time after time. The difference in income caused the different pattern on spending pattern. People that have higher income usually spend more their wants. They do not care about the price of product. They are looking for quality, luxury items and sometimes they are looking for pride when buy something. The people that have low disposable income only can buy rice and protein to eat. This will cause the poor people have difference from rich people spending pattern. The same consumption have been observed in many developed countries and also now in some developing countries. There are some factors because why different income groups will have spending patterns: 1. Income has risen. The higher a person's income their spending pattern. higher income people to spend more on satisfying their wants, so when Risen their income, they can buy more good and service so it cause changes in spending patterns. Nowadays, credit card also makes people brave to buy good and service. With the credits a card some people can buy some good and services that he really wants, even though that thing is expensive. Example: people buy Samsung galaxy tab 3 10 inch, which they did not have enough money. But with credit card, they can buy tab 3 with installment. 2. Higher income changes someone’s social attitude. Usually someone that have higher income buy good do not based on need and wants. Sometimes they buy goods based on pride. This made the groups that have high income will spend their money to buy luxury item, holiday, donation, etc. usually these people care about health conscious so they will spend their money buy good or service that connected with healthiness. In poor people they do not much care about the health conscious, it make the spending pattern of them more in food and shelter. Spending pattern in tourism and technology also depends from their income. The more income, they will spend money for traveling, holidays and to buy new electronic with new technology. So back again spending pattern is determined from the amount of disposable income they have.
So in conclusion, the spending pattern depends on income group, gender, changing in taste, technology and social attitude. Rich people that have high disposable income have varieties pattern. Their pattern will rise until some new product launch, they will follow the development of technology. Poor people only have the same spending pattern. They will buy food with their disposable income and if possible they will buy anything else to satisfy their wants. Winson 8A
In definition, spending is when we pay out money to buy goods and services. There are many factors that influenced spending. Some factors are income which means their behavior, wealth, consumer confidence which means they think about their future, and interest rate which is the cost of money. Income is therefore the first factor influencing spending. There are three different income groups who have different spending patterns, which are the upper class, middle class, and lower class people.
Upper class people are the people who are rich. Peoples in the upper class will spend their money on luxury items, leisure activities and other goods and services to satisfy their wants. And they have enough money to buy these things. Upper class people are skilled; they have education that’s why they can make money, and become wealthy. Example of the upper class people are engineer, architect, doctors, and CEO.
Middle class people are the people who are not too rich, but not poor. They have enough money to spend for their basic needs, such as food, clothing, and housing. But they don’t have enough money to buy expensive luxuries like upper class people do. These people are normal, not too rich and not too poor.
Lower class people are the people who are poor. They tend to spend all of their money to meet basic needs for food, clothing, housing and heating, and if possible to satisfy a few wants from time to time. Most lower class people don’t have any education. Examples of the lower class people are maids, securities, and a fruit picker.
What we buy can change from time to time. For example teenagers will buy for clothes or accessories, and older people like grandmas and grandpas will spend more on household goods for their homes. The consumption trends have been observed and the results are some factors. These factors are that real incomes have risen, people work fewer hours than many years ago, social attitudes have changed, couples are marrying later in life and having fewer children, people have become more health conscious, concern for the environment is growing, and technology has advanced rapidly.
So in conclusion different income groups have different spending patterns because of their groups, which are the upper class people, middle class people, and lower class people. If they are rich, they will spend their money for anything they want and wished for. But if they are poor, they can’t spend their money for anything they wished for. They only can spend their money on their basic needs. Audrey Tan 8A
In economy statement, there are three types of income rate such as higher income, middle income and lower income. Based on the income rate, everypeople have different pattern in spending their income. The differences are caused by the worker skill and consumption behaviour.
People with higher income, can spending much than people with middle and lower income. They are dilligent, smart and hardworker. They also get excellent education and ability, so that they have high skill and have high income. They also take many experience in their journey of their career. They are some occupation which have high income, for example, doctor, pilot, arsitect,artist, actor, musician, CEO, CFO. It is because they are paid with high income. On the other hand, people with middle income only have semi skilled. They also get standard education but not specialised. They work for earn some money and for fulfill their needs and satisfactions. They save money less than people with high income. The occupation with middle income such as, teacher, office staff, security, cashier. Whereas, people with lower income only earn little money. Moreover, they are so difficult even just fulfill their daily needs. People with lower income for example, maid,office girl or boy, factory labour, etc, usually can not save their money, even they have, they only can save little money.
Consumption behaviour is also one of the important factor that influence how to people with high, middle and low income can spend or save their money. People with high income usually have high consumption habit. They do not only want to buy anything they want to satisfy theirselves, such as, luxury and hig class car, jewelery, expensive furniture, etc, but also want to spend their holiday to overseas and eat at expensive restaurant. They can be a shopaholic or spendrift. On the other hand, people with middle income prefer not to be spendrift. They are more miser. Though they only save little money every month,for long time,their saving will be enough to buy something that they want, such as, sophisticated gadget, LED Tv, air conditioned, refrigerator, washing machine. Besides, pretty poor for people with lower income, they can buy anything they want. They feel so gratefull even they can only fulfil their daily needs. They can not only buy luxury things, but also can not have savings even just a little.
In conclusion, every people have their own way in spending their money. Their decision is depend on the their skill in working and consumption behaviour. People are never to feel satisfied. But it is still good idea as long as they are responsible to fulfil their needs and have little saving for rainy day.
People buy goods and services to satisfy their wants and needs. Consumsion involves the using up of goods and services to satisfy wants. People will choose to spend their disposable income on consuming those goods and services that provide them with the most satisfaction or utility. That is , a person with a given disposable income and faced with a set of price to buy difference goods and services , will consume those goods and services that maximise his/her total utility. This makes everyone have difference spending pattern. Spending pattern is diference base on income groups , taste,fashion, gender,and sometimes about pride. The proportion of disposable individual spend, known as their propensity to consume. Disposable income is the gross income – taxes. People with the higher income spend their money to buy goods and services that satisfy their wants. They only spend a little amount from their disposable income to buy foods, shelter, and basic needs. Sometimes they buy goods base on how much the price of the product. Higher the price of the product, better for them to buy, because the rich people buy goods like that for pride. A rich peple spend more for luxury item, laser activities but overall will tend to spend a lower proportion of their income. People with the lower income tend to spend all their money from their income to meet basic needs, examples: foods, clothing, housing, and heating. And if possible they will satisfy a few wants from time to time . if someone’s income has increase usually tha ability to buy from them also increase. Higher incomes enable people to spend more on satisfying their wants. Now days people easier to make credit card. The higher income of that person, he will get higher limit on his credit card. Credit card is useful to boost spending also reflex a change in attitude over time towards borrowings and debt. The rich people often use their money to have lesser time and spending on holiday, sporting activity, buy goods for their hobies (like garden planes, game) and eating out in a restaurant. This kind of situation makes a rich people spend more money. It cause the spending pattern of rich people more variative ( their money used to spend a lot of goods and services). Poor people usually doesn’t care about the healthand enviroment . it is diffrent from rich people, rich people will focus about health conscious, usually they will buy exercise equipment , gym membership. Demand for healthier food has also increase so that the sales of organic foods is increase. The demand for fruit and vegetables , supplement also increase but the poor people does not spend their money to buy organic foods, supplement. In conclusion income groups makes a different spending pattern. Spending pattern of rich people will be variative (they will buy many kind of goods and services they want). The poor people only have a similar spending pattern, their income is used to spend basic needs like rice and simple clothing
There are a lot of income groups,each income groups have different spending pattern.They're spending patterns are based on their incomes.If that certain group has a high average income comparing to the other income group then that group would have a higher desire to consume more goods and services to satisfy themselves.But the income group that has the lowest average income would've spend less and would've consume what they need,and not their wants.But this can change if the group with high average income has no confidence and decided to consume less than the group with less average income but with a high confidence.We were also talking about our gross income,not our disposable and real income.People that have more disposable income will be the one to spend more.The behavior of people in each income groups are absolutely different.Some people wanted to consume more,some wanted to save more.People with more children will also spend more for the sake of their children and the sake of their family.If these income groups have different age range will also make a big difference in the spending pattern of these income groups.Adults with families would spend more for their cost of living because now they need to pay more money for their family to survive.It's certainly more spending than when they were young and still living alone,they only needs to pay 1 human's cost of living.Thus the spending differs between each age range.People also consume because of the utility of a product.If the product has high utility then people would buy it.This is called wants satisfying power.Spending patterns also differ between each income groups because of the wealth they own.A guy with high amount of wealth will have more confidence when consuming than a guy with a bit amount of wealth.The guy with more wealth would feel more secure because of all the property they own.The guy with a bit amount of wealth would feel insecure.The interest rate also effects the spending patterns of different income groups.If the interest rate of saving is more then the guy would save.But if it's low,the guy would spend more.He would think that he'd rather spend than save with low interest rate.The availability to spend also differs between income groups.Thus the spending pattern differ.An income group may have no less things to spend on rather than an income group with more things to spend on.Lastly,the occupations of each income groups are different.People with a high-paid occupation will result in a high disposable income and will spend more.People with less-paid occupation will result in a low disposable income and will spend less too.For example a doctor would earn more than a cleaner.Their spending pattern would be very different.All these factors or conditions affects the spending patterns of different income groups.The behavior of a person started to change because of all this and they changed.If they formerly save more than they spend,these conditions may change their behaviors.Now they will spend more than they save.It all comes down to the willingness of someone to consume. Jovan Pan 8A
Gross income is the very first income we earn from the job we work and it got to be deducted by the taxes for government which after that is then our disposable income. Taxes is very important in a country because it provides many public facilities and subsidies to the vulnerable citizen, therefore everyone should and must pay taxes on time. Disposable income is again the final income we can keep and to decide whether to spend all of them, to save or to lend it to someone else.
People who are rich, have a great job and recieves a very high wage would spend more than saving. Because they have the enough money to buy the goods now. These people save money in a very low amount, for example a rich person earns $200 000 per month, then saves $95 000for future education for his children, the rest were spent on foods and many tertiary stuff, like a LCD TV, a sportscar, diamonds for his wife, gadgets, home theater set, other ornaments, expensive plants and exotic fishes, and exotic pets, etc
Most consumers’ today have the propensity to consume, which means the willingness for them to consume goods and services with a rise in income is increasing. As well as technological advancement, people start to be interested in the latest modern gadgets and equipments like Apple products, Blackberry products, Samsung products and many others. With more education, research and health information, the behavior and their social attitude have changed gradually.
Wealth represents consumer’s amount of material possessions. For majority of people, wealth may be in the form of shares, properties, or even savings in banks. The role of wealth in consumer’s spending pattern is somewhat great. For instance, when people hold a greater amount of wealth, they are more likely to spend more to satisfy their necessities and desirables.
Interest rate is the amount charge by lender to a borrower for the use of assets and is usually expressed in percentage. Interest rate plays a role in shaping consumer’s expenditure patterns. Lower interest rate makes it easier for people to spend and borrow money, as lower interest rate means consumers will be spending less on the interest costs, leaving them with more income to spend with.
There are 3 income classes; the upper class, the middle class, and the poverty level. Everyone’s expenditure patterns are, as a matter of fact, affected by all the factors above. All 3 different income groups obviously have different purchasing power as they have different amount of income, leading to the different spending patterns.
The increase and decrease of income level affects most of the consumers’ expenditure patterns as it is very clear that the wealthier a person is, the more they will spend. However, there are still many reasons beside only the level of income. Different countries have different consumers’ spending pattern because of their social attitude and technological advancement which influence them. There are also countries which the poor are far more than the rich, which results in slow development in the economy and lower consumers’ expenditure patterns. In addition, it is very important and essential for the government to take note of the country’s consumer’s spending patterns.
Different income groups have different spending pattern. This happen because there are some factors, such as depend some of the condition of that people (rich or poor), financial mentality, desire vs ability to attain luxury, maybe they want to save more than spending, they’re consumption is greater than saving so they do borrowing, they’re purchasing power is different, and they have different behavior. There also some other reason, which is the gross income, such as wages, income, and their salary. We will discuss more about this in the next paragraph.
The first common reason is they have different gross income, they have different income, different wages, and different salary. This make direct tax to create disposable income. Disposable income include spending and saving. There are several factors that influencing in spending pattern, such as their income, their wealth, consumer confidence, and their interest rate. We will start with income, people get income to buy goods and services to fulfill their needs and wants. There are 3 types of income groups, such as, upper, middle, and lower class. People with higher income will likely to spend more money because they think that they can buy goods and service to fulfill their needs and wants, because they can fulfill their needs and wants, they will buy luxury needs and luxury needs are expensive, such as expensive car, bag, shoes, etc. People with less income will likely to save more, because they need to save money for their needs and wants for tomorrow (in the future). Second, is depend on their wealth. If they’re wealth or rich they will spend more, because they already fulfill their needs and wants so they likely to spend for other expensive goods. Third, is depend on consumer confidence. They will likely to buy goods for their stock, so they will spend more. And the fourth is about the interest rate. Interest rate is a cost of money. When interest rates get too high, consumers stop spending on luxuries and buying other goods. at first it's a slowdown, but then consumer spending becomes really low. And when the interest rates are low, the consumers spend like crazy.
There are some reason that makes people changes in consumption. First, rise in real income, level of income adjusted for inflation. If people have rise in their real income, they will spend more. Second, people work less hour, but they earn more money, so it’s their benefit. And they think is speding to buy goods and services. Third, social attitudes has changed. It depend on their behavior, affect the social expetation. Fourth, more technology advancement. With the new invantion, people likely to buy or spend their money for the most modern technology. Fifth, health conscious. So it brings many people to spend less money on cigarettes (for smoking).
In conclusion, different income groups have different spending pattern because of some reasons, such as depend on their income, their wealth, consumer confidence, and the interest rate. That factors make people change in their spending pattern.
Every people have different income but some of them are the same. There are different income groups (upper, middle, and lower class) have different spending patterns. They don’t have the same amount of money so some of them must save less and spend more. The reasons are because they have some economical problem like they must buy food. They must spend for their family too like buy a new computer, buy a jewelery for the wife, and so on. Maybe the poor will spend less because the food maybe more expensive. It’s depend on the people if they want to buy it or not. The spending is depend on the factor like income. The higher income the higher spending. The other is the consumer confident. If the consumer sure to buy the goods they will buy the goods but the factor can be changed with the consumer like the rise in inflation. The higher the cost of goods and service the consumer will not buy it. The other is social attitude change. Now iPhone 5 is popular this year but the next year iPhone 5 will be not popular next year because there are new gadget next year. The other is because the job the person. Some person got a higher wages than other so he/she maybe spend more than the other. The young spend less money than the adult because the young have less money than the adult. The young doesn’t spend so much because the young only buy a cheap goods like eating at the McDonald, go to cinema and buy ticket, buy a new computer games and the other. The adult spend more money because they have more money than the adult but the adult spend it for household goods like paying a electricity, paying a gas bill, and spend the money for the business. Some of the reason is because they want to save the money than spending the money. The reason they want to save is for the emergency. This could cover an unexpected car repair and if the dad suddenly fired the family still have some money to spend. They also save for the future consumption. They will save the money for the kids school fee because they will use the other money for saving. The other reason why people save is the interest rate will increase and the money will increase for example if they save $10000 now and then the next month they will get $15000. The other is for future consumer goods. They will save today and they will spend it for next year to buy a expensive goods and service, Some people have different spending income is because the money. If they have the same amount of money they will have the same spending patterns and the spending patterns will not change so that why they have different factor. So the conclusion of this discussion is that people have different spending factor because of some of these factor and reason.
When people work, they will earn money. The money they have got will be used for three things. These three things are spending, saving, and borrowing. Spending is needed for satisfy our needs and wants. Another term of the words ‘satisfy need and wants’ is utility. We can make a definition that utility is a want satisfying. And want satisfying is a power of a commodity. As we can see, people get salary with a different amount. Because of that, they will spend and save money with a different amount also. Another term of it is a different income group have different spending patterns. There are three types of income groups. These three types are rich groups, middle groups, and low groups. Now we will discuss why they have different spending patterns in the next paragraph. Rich groups are usually skilled workers. Of course, they have higher income. Most of them or maybe all of them have primary and secondary needs that already fulfilled. They will pay anything for themselves’ wants. Of course w know that the utilization of rich groups are higher than other groups because of they can pay anything that they want. They never think how many their money will be used, as long as their wants satisfying are fulfilled. The example of goods that have strong utilization is gadgets. It has a strong utilization because their proudness of the certain expensive goods that they can buy. It also can be that they are prestige with their friends that work with them. Of course they also will buy all things with high quality, or the branded goods one. For women, they buy jewelries that have high price. Also they will buy and make villas, apartments, etc. Rich groups are including CEOs, business people, managers, president, artists, etc. Middle groups are usually semi-skilled workers. These groups are between low groups and rich groups. Their income is ‘enough’ for them. For most of people in these groups, they already can fulfill their primary needs. The utilization of this group will be in secondary part. It is something that can support their life. Examples are hand phone, television, car, etc. however it’s not as expensive as rich group. It means that it is not the branded things. Middle groups are including teachers, entrepreneurs, nurses, etc. Low groups are usually unskilled workers. Their income is quiet low. For these groups, usually they can’t fulfill their primary needs. It can be place where they live, or what will they eat, or what should they wear. Also if they have changes in their income (for increase income), they will be spending more. And also if they have changes in their income (for decrease income), they will be saving more. As we can see from the differences between the three different groups, technologies that increase rapidly might affect the spending money patterns. People might used the money more on technology. So the conclusion is different group incomes have different spending patterns of some reasons.
Income is money received on a regular basis for work or investment. Gross income is income that has not been deducted by direct tax (i.e. income tax), whereas disposable income is income after being deducted by direct tax. The word disposable means “intended to use once” – money can only be used once, to save or to spend. Income, specifically disposable income, is one of the factors that determines the spending patterns of an individual. Different income groups have different spending patterns. Generally, higher income groups tend to have higher expenditure. The more a person earns, the more his consumption of goods and services is. This is driven by the human nature to never be content with their current conditions and wanting more. This is the reason behind why people buy goods and services. They do as it gives utility, the want satisfying power of a good or service, to the consumer. Income and expenditure has a positive relationship. Different income groups have different habits, interests and needs. For example, a larger percentage of the incomes of low-income households is contributed to housing, fuel and power rather than the percentage of the incomes of high-income households, although the amount spent for the good or service might be higher for richer households. The most striking example is the purchase of alcohol and tobacco. Low-income households spend a larger percentage of their income to this compared to high-income households, but cigarettes purchased by them are much cheaper than the wine and cigars rich households purchase. Through income levels, households (especially in the US) are divided into upper, middle, and lower classes, although there is no specific basis or mathematical measurement for this. To be more specific, there are lower middle classes and upper middle classes inbetween. Upper class households usually have jobs such as investors, directors, entrepreneurs, or just inherited money from their parents. They are consider the 1% or 5% of the US population. These households make approximately $150,000+ a year (the 5%), or over $250,000 a year (the 1%). Households with inherited money are referred to ‘old money’, but households who have to work hard to earn their wealth are usually referred to as ‘new money’. The middle class can be split into three categories: The upper middle class, making the majority population of the US, which is male-dominated, earn a high income of $100,000 or more, and consists of well-educated, white-collar workers. Below the upper middle class is the lower middle class, earning around $32,500-$60,000. These people normally have college education, but do not have the degree to work in higher positions. They consist of lower-level white-collar workers. At the bottom is the working class or lower, who are the blue-collar workers, having jobs such as factory workers, police officers and truck drivers. They do not have a high level of education, and are often paid hourly, with salaries ranging from $23,050 to $32,500, just above the poverty line. People below the poverty level are those who are unable to fulfill basic needs such as food, clothing and shelter. The US Census Bureau estimates around 15% of the population is below the poverty level, around 42 million people. These people would have different spending patterns, where the lower class would spend more on basic needs while the upper classes spending more on leisure. The reason for this is because upper class households simply have more money to spend. Basic needs, such as housing, food, clothing, do not take up much of their income. The money they have left would either be saved or used to buy luxury goods, such as expensive sports cars, houses, or holidays to expensive places. The lower class, in contrast, do not have the money to do so as they’ve contributed a large percentage of their income on basic needs.
In conclusion, different income groups have different spending patterns because they have different lifestyles. High-income households are more drawn to spending on entertainment, leisure, and luxury goods as they have enough money to do so, while low-income households are more likely to spend on food, housing, fuel and power as they must fulfill their basic needs before satisfying any other wants.
Different income groups, (upper, middle, and lower class) have different spending patterns for a number of reasons such as the lack or abundance of funds, financial mentality, desire vs. ability to attain luxury. Financial Priority as pertaining to social economical status also plays a large role in motivated spending. There are some who would go on to suggest that the IQ's of those in both the lower and upper bracket are directly related to their social economical status; IE, The less intelligent, the lower the status, etc. Which would, if it where the case, play another large role in specific spending patterns.
ReplyDeletePeople who are rich, have great job and very high wage would spend more than saving. Because they have the enough money to buy the goods now. These people save money in a very low amount, for example a rich person earns $40000 per month, then he save $10000 for future education for his children, the $30000 rest were spent on foods and many tertiary stuff, like a plasma tv, an expensive sofa, jewelry for his wife, gadgets, expensive toys for his children, other ornaments like expensive porcelain, plant pots and aquariums, and pets like ornamental fishes and exotic birds and many more.
People who are not too rich, but not too poor are called middle-class, they would spend and save in equal amount, for example a middle-classed family would have $1000 earnings every month, so they will spend $500, the rest of the money is saved for future use and wants, like education bills for children, university, expensive gadgets and jewelry and many more. They spend the $500 rest for goods which fulfill needs and in the present, like foods, hygiene product, and many more.
People who are considered poor, are called low-class. These people usually have no job (unemployed), or have at least an unskilled job, which are poorly paid/have low wage. These people sometimes are high school graduates, because they can’t support their education bills. They also save more than spend, though for only some who work. They only buy cheap food, cheap hygiene products, and more. These people are very careful on spending something. They only want to buy something cheap and useful for their needs only. They also spend few on wants because they only want to spend money on their urgencies like hunger or hygiene. Even if they would buy toys for their child, they would find ones which are in the traditional market and are cheaply made so they could afford it. They tend to try to save more to support their child’s education, though they usually can’t support them because these category of class usually have many children, usually 4-6 children, and they usually can’t feed all of them and can’t support all of their school bills, so it only works with poor people with few children, because their wages aren’t very high too but they still could at least support their only child’s school bills and made him/her successful in the future.
Sources :
http://opengecko.com/economics/discuss-how-and-why-different-income-groups-have-different-expenditure-patterns-spending-saving-and-borrowing/
Jonathan/8A
Based on the spending and earning of money, people classified into three groups, high class societies, middle class societies, and low class societies. In This classification, high class people are someone who earn a high standard of wages and have more money to spend outside the basic needs. Example for high class societies are Director of a company, Manager of a company, Executive (CEO), Government Officials, President, Artists, and Businessmen. And low class people are someone who earn low standard of wages and only have a few money to spend outside the basic needs. The example for low class societies are Maids, Beggars, Drivers, Cleaning service,and scavengers. For the middle class societies, they are people who earn middle level of wages, so, their ability to spend their money are in the middle of high level societies and low level societies. For example, employees, engineers, entrepreneurs, teacher, doctors,and scientists.
ReplyDeleteBy This classification, people has different pattern for what kind of needs they spend the money they have already earned. For the high class society who consider themselves rich and have a lot of money, they have excess money to spend outside the basic need, for example, they can buy car, a luxury house, apartment, gold, jewelry, private helicopter, private yacht, and Villa. The percentage of their spending is higher in other than basic needs. They spend their money in order to seek the pleasure of life.
For middle class societies, they also have excess money from what they have earned. But, not much as the high class societies. So, their excess money they usually spent for something which is support their life. For example, computer, mobile phone, they also probably have a car but not as luxury as the high class societies, household appliances, etc. most people who live in this world are middle class societies. It's only about a few are high class societies. The government policy in order to eliminate poverty, launch the program to increase the middle class societies, because the middle class societies are the foundation of economy of a country.
Low class societies do not have excess money to spend from what they have earned from their job. So, they only can cover basic needs for what they have earned. Basic needs are houses, clothes, and foods. Low class societies consider to be poor people economically. For example, beggar who earn money from other people mercy or sympathy.
For the conclusion, Different pattern of spending determine by various earning of people. People who earn a lot of money whose consider to be rich have large amount of excess money, so they can spend it for their own hobbies or pleasure. Middle class societies also have excess money but not as much as the high class societies. They earn their excess money to support their life and increase their welfare. And for the low class societies, they do not have excess money to spend outside three basic needs (foods, houses and clothes). They do not have money for other needs.
-Celia Pricilla Mesatania 8A-
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ReplyDeleteWhen we analyze, spending pattern is related to the amount of income that we receive, there is different level of income for each group which it determines how much the group will spend. Some people spend higher such as government and success business owner. While others spend lower such as employer, worker, waiters, assistant and helper.
ReplyDeleteRicher group have high wages or position in their job that enable them to earn much and they are skilled people. In that way, they spend more because people in that group can buy anything to satisfy their want although the cost of the goods is high but it does not matter. One example of the goods is electronic gadgets, electronic gadgets have strong utilization, the firms keep on producing new gadgets such as hand phone, tablet and notebook with more high quality that attract many customers to buy them especially if those gadgets are famous branded. But the disadvantage is that they will need to pay higher taxes due to higher income. They also have high consumer confidence in the future, which means that how the consumer behave, is it changing or the same when they face something like economic problems such as lack of money to buy house, car and educate their children. They earn the highest interest rate among all the level of group because they have high income.
Middle group earn less than the rich group of course, it is because they are less skilled and specialization but it does not mean that they are unemployed. The effect of having less skilled is that they don’t have high position compared to rich group and the spending pattern will be lower; they cannot buy luxury goods like expensive car, shirt, and shoes because their money is limited. In impact, they can only buy cheap or middle price of goods but they still can fulfill their need with lower standard of quality such as simple house, enough money to assume the family. So they can fulfill their need but in satisfying their want, they will have lesser chance to do that.
Low group has the lowest spending pattern; they cannot effort to even fulfill their need because they have no skill and it made them unemployed or employed but low-income, maybe they don’t have a good education when they were young. They depend on other people like government by getting subsidies to help them to fulfill the basic need such as food, shelter, clothes and they have low consumer confidence in future which make their behavior changes. Low group people have low-interest rate because they have lower-income that effect the amount of interest rate they earn for living everyday like paying family cost and surviving later in the future. When people recognize the change of the behavior, it is called trend.
In this the conclusion show us that every people don’t have the same spending pattern, although they are in the same country, age and type of jobs because different companies give a different amount of income.
Felicia Angeline 8a
Each income group have different purchasing power, consumption level of high income groups is high because that income groups earns more income so that can consume more goods and low income people's consumption level is low because that have less income than the worker that works in a high income group so they will choose to save it rather than consume it. They choose to safe it because it will be useful for their future. When a workers income increase and the things costs remains the same, so there will be more demand for that goods and services, which means the consumption will increases and the propensity to save is decreasing. Change in income typically results in a change in demand for goods and services. The actual change in demand that occurs will depend on the specific good or service. Additionally, different individuals will respond differently to changes in their income. Some individuals will tend to save more of their increased income than others, as opposed to spending the increase on goods and services. The propensity to consume is a measurement of a consumer's consumption and savings choices given a particular increase in income. Some individuals will tend to spend a larger proportion of an increase in income than others. Superior goods are goods that a consumer is more likely to demand and consume given an increase in income. Such goods include designer clothing, restaurant meals and electronics. Consumption of these goods will increase depending on both the propensity to consumer of the consumer and the income elasticity of demand of the good or service. Consumption expenditures determinants are ceteris paribus factors that determine the position of the consumption line that plots the induced relation between consumption and income. Changes in these determinants then cause shifts of the consumption line. The idea that consumption depends primarily on wealth is intuitively weak because consumption is aggregated over the population, while wealth is concentrated in a small segment of that population. A person with little or no wealth will spend the next dollar meeting some unsatisfied need, while the person with lots of wealth has the option of devoting it to rent-seeking or accumulation in an off-shore shelter.
ReplyDeleteThe conclusion is each income groups have different consumption because the consumption rate is determine by how much income we receive, if we earn high wages we have 2 choices either u save the remaining or you use all of your wages to buy goods and services.
Robin 8a
People with different incomes or assets have different patterns of spending in their needs and wants. Well, rich people spends goods and services that are exclusive or goods and services that are expensive to satisfy their wants. While poor people with less financials usually spends their money to only fulfill their needs, they rarely buy their wants because without the goods they want they still could live, so in conclusion from what i say from above is that the rich people spends their money from needs and wants but in high quality or with more money to be more satisfied with the goods and services ,while the poor people are mostly only spending for their needs because they have no enough money to buy the wants while needing to buy their needs, and they could only buy needs that are not that good or cheaper because they need to save some money or they need to buy more goods and services. The poor people spends goods and services not to satisfy their wants but to just fulfill their needs or to just buy goods and services that is enough for them to live.
ReplyDeleteAnother factor of different spending pattern is because of age. The young people have different spending patterns than the older people because older and younger people have different needs and wants. Most young people would spend more rather than saving because they are still in the youth or still liking to buy goods and services, while in the opposite side from the young people, older people or people that are already married will spend less and save more, why?, because the older people needs to save for their future or for their families fund like electricity bills,school,house,clothes,foods,and more. There are some examples of the difference spending like when the young people would like to buy new or trending gadgets even tough it is expensive, while most of the older people are not interested or would not buy new gadgets but will still use the old gadgets and save the money for importance, such as paying college or school bills. In conclusion is that people with different age do have different spending patterns.
There are also difference in spending patterns because of different gender from male and female. Male people usually are interested and craving for sports equipment or new gadgets that are in the trends. While most female are interested and likes to buy cosmetics or beauty equipment,shoes,and clothes. From what i analyze is that most woman spends or shops goods and services more than male, but once a male spends for goods and services it will cost more but most male would only spend only sometimes or that females spends more often. In conclusion that different patterns of spending could also be affected by gender of a person.
The spending pattern could also be affected by the interest rate given by the bank. Because when people receive their wages or income they would prefer spending them on goods and services if the bank interest rate is less or low. By having a higher interest rate in bank people would be more attracted to save their money but if the interest rate is low they would be more attracted to spend their money on buying goods and services. In conclusion is that interest rate could affect the spending pattern because of attraction to buy goods and services.
Brian.A
8A
There are 3 group of income class (high, middle, and lower class). High income class are usually skilled worker which are educated and have special knowledge and abilities. They also perform high level of task and has higher demand than supply which make them pay more. For example soldier, CEO, and teacher. Middle income class are the semi-skilled worker. Lower income class are the unskilled worker which are not educated and has lower level of task and also less knowledge and abilities.
ReplyDeleteHigh income class are the worker which can fulfill their primary needs like shelter, food, and clothes as well as their luxury thing like a expensive big house, sport car, jewelry and have foreign holidays. They have higher expenditure in luxury needs because primary needs which have to be fulfill are cost cheaper than the luxury things.
Middle income class are the worker which are pay less than the high income class, but they can still fulfill their primary needs as well as some least expensive things like motorcycle, smartphone, TV.
Lower income class are the worker which are pay the lowest because they are less educated and has less knowledge and ability. They feel difficult even to fulfill their basic needs and they can't try the expensive items because it's already hard to fulfill their basic needs in order to them to survive. Lower income class for example a beggar.
The conclusion is expenditure of a person differ with the real income and the wants and needs of a person.
Nicolas Samuel Lumy
8A
People buy goods and service to satisfy their wants and needs. The abilities to buy goods and service depend from their income. Income in question is disposable income. Disposable income is the net income people give after reduced income tax. The higher disposable income, the spending will be varieties. This cause people that have higher disposable income can buy anything, the goods and service that they bought was luxury item. In other case, poor people must spend all of their income to buy the basic needs like food, shelter, cloth and if possible to satisfy few wants from time after time. The difference in income caused the different pattern on spending pattern.
ReplyDeletePeople that have higher income usually spend more their wants. They do not care about the price of product. They are looking for quality, luxury items and sometimes they are looking for pride when buy something. The people that have low disposable income only can buy rice and protein to eat. This will cause the poor people have difference from rich people spending pattern. The same consumption have been observed in many developed countries and also now in some developing countries. There are some factors because why different income groups will have spending patterns:
1. Income has risen. The higher a person's income their spending pattern. higher income people to spend more on satisfying their wants, so when Risen their income, they can buy more good and service so it cause changes in spending patterns. Nowadays, credit card also makes people brave to buy good and service. With the credits a card some people can buy some good and services that he really wants, even though that thing is expensive. Example: people buy Samsung galaxy tab 3 10 inch, which they did not have enough money. But with credit card, they can buy tab 3 with installment.
2. Higher income changes someone’s social attitude. Usually someone that have higher income buy good do not based on need and wants. Sometimes they buy goods based on pride. This made the groups that have high income will spend their money to buy luxury item, holiday, donation, etc. usually these people care about health conscious so they will spend their money buy good or service that connected with healthiness. In poor people they do not much care about the health conscious, it make the spending pattern of them more in food and shelter.
Spending pattern in tourism and technology also depends from their income. The more income, they will spend money for traveling, holidays and to buy new electronic with new technology. So back again spending pattern is determined from the amount of disposable income they have.
So in conclusion, the spending pattern depends on income group, gender, changing in taste, technology and social attitude. Rich people that have high disposable income have varieties pattern. Their pattern will rise until some new product launch, they will follow the development of technology. Poor people only have the same spending pattern. They will buy food with their disposable income and if possible they will buy anything else to satisfy their wants.
Winson 8A
In definition, spending is when we pay out money to buy goods and services. There are many factors that influenced spending. Some factors are income which means their behavior, wealth, consumer confidence which means they think about their future, and interest rate which is the cost of money. Income is therefore the first factor influencing spending. There are three different income groups who have different spending patterns, which are the upper class, middle class, and lower class people.
ReplyDeleteUpper class people are the people who are rich. Peoples in the upper class will spend their money on luxury items, leisure activities and other goods and services to satisfy their wants. And they have enough money to buy these things. Upper class people are skilled; they have education that’s why they can make money, and become wealthy. Example of the upper class people are engineer, architect, doctors, and CEO.
Middle class people are the people who are not too rich, but not poor. They have enough money to spend for their basic needs, such as food, clothing, and housing. But they don’t have enough money to buy expensive luxuries like upper class people do. These people are normal, not too rich and not too poor.
Lower class people are the people who are poor. They tend to spend all of their money to meet basic needs for food, clothing, housing and heating, and if possible to satisfy a few wants from time to time. Most lower class people don’t have any education. Examples of the lower class people are maids, securities, and a fruit picker.
What we buy can change from time to time. For example teenagers will buy for clothes or accessories, and older people like grandmas and grandpas will spend more on household goods for their homes. The consumption trends have been observed and the results are some factors. These factors are that real incomes have risen, people work fewer hours than many years ago, social attitudes have changed, couples are marrying later in life and having fewer children, people have become more health conscious, concern for the environment is growing, and technology has advanced rapidly.
So in conclusion different income groups have different spending patterns because of their groups, which are the upper class people, middle class people, and lower class people. If they are rich, they will spend their money for anything they want and wished for. But if they are poor, they can’t spend their money for anything they wished for. They only can spend their money on their basic needs.
Audrey Tan 8A
In economy statement, there are three types of income rate such as higher income, middle income and lower income. Based on the income rate, everypeople have different pattern in spending their income. The differences are caused by the worker skill and consumption behaviour.
ReplyDeletePeople with higher income, can spending much than people with middle and lower income. They are dilligent, smart and hardworker. They also get excellent education and ability, so that they have high skill and have high income. They also take many experience in their journey of their career. They are some occupation which have high income, for example, doctor, pilot, arsitect,artist, actor, musician, CEO, CFO. It is because they are paid with high income. On the other hand, people with middle income only have semi skilled. They also get standard education but not specialised. They work for earn some money and for fulfill their needs and satisfactions. They save money less than people with high income. The occupation with middle income such as, teacher, office staff, security, cashier. Whereas, people with lower income only earn little money. Moreover, they are so difficult even just fulfill their daily needs. People with lower income for example, maid,office girl or boy, factory labour, etc, usually can not save their money, even they have, they only can save little money.
Consumption behaviour is also one of the important factor that influence how to people with high, middle and low income can spend or save their money. People with high income usually have high consumption habit. They do not only want to buy anything they want to satisfy theirselves, such as, luxury and hig class car, jewelery, expensive furniture, etc, but also want to spend their holiday to overseas and eat at expensive restaurant. They can be a shopaholic or spendrift. On the other hand, people with middle income prefer not to be spendrift. They are more miser. Though they only save little money every month,for long time,their saving will be enough to buy something that they want, such as, sophisticated gadget, LED Tv, air conditioned, refrigerator, washing machine. Besides, pretty poor for people with lower income, they can buy anything they want. They feel so gratefull even they can only fulfil their daily needs. They can not only buy luxury things, but also can not have savings even just a little.
In conclusion, every people have their own way in spending their money. Their decision is depend on the their skill in working and consumption behaviour. People are never to feel satisfied. But it is still good idea as long as they are responsible to fulfil their needs and have little saving for rainy day.
People buy goods and services to satisfy their wants and needs. Consumsion involves the using up of goods and services to satisfy wants. People will choose to spend their disposable income on consuming those goods and services that provide them with the most satisfaction or utility. That is , a person with a given disposable income and faced with a set of price to buy difference goods and services , will consume those goods and services that maximise his/her total utility. This makes everyone have difference spending pattern. Spending pattern is diference base on income groups , taste,fashion, gender,and sometimes about pride. The proportion of disposable individual spend, known as their propensity to consume. Disposable income is the gross income – taxes.
ReplyDeletePeople with the higher income spend their money to buy goods and services that satisfy their wants. They only spend a little amount from their disposable income to buy foods, shelter, and basic needs. Sometimes they buy goods base on how much the price of the product. Higher the price of the product, better for them to buy, because the rich people buy goods like that for pride. A rich peple spend more for luxury item, laser activities but overall will tend to spend a lower proportion of their income.
People with the lower income tend to spend all their money from their income to meet basic needs, examples: foods, clothing, housing, and heating. And if possible they will satisfy a few wants from time to time . if someone’s income has increase usually tha ability to buy from them also increase. Higher incomes enable people to spend more on satisfying their wants. Now days people easier to make credit card. The higher income of that person, he will get higher limit on his credit card. Credit card is useful to boost spending also reflex a change in attitude over time towards borrowings and debt.
The rich people often use their money to have lesser time and spending on holiday, sporting activity, buy goods for their hobies (like garden planes, game) and eating out in a restaurant. This kind of situation makes a rich people spend more money. It cause the spending pattern of rich people more variative ( their money used to spend a lot of goods and services).
Poor people usually doesn’t care about the healthand enviroment . it is diffrent from rich people, rich people will focus about health conscious, usually they will buy exercise equipment , gym membership. Demand for healthier food has also increase so that the sales of organic foods is increase. The demand for fruit and vegetables , supplement also increase but the poor people does not spend their money to buy organic foods, supplement.
In conclusion income groups makes a different spending pattern. Spending pattern of rich people will be variative (they will buy many kind of goods and services they want). The poor people only have a similar spending pattern, their income is used to spend basic needs like rice and simple clothing
There are a lot of income groups,each income groups have different spending pattern.They're spending patterns are based on their incomes.If that certain group has a high average income comparing to the other income group then that group would have a higher desire to consume more goods and services to satisfy themselves.But the income group that has the lowest average income would've spend less and would've consume what they need,and not their wants.But this can change if the group with high average income has no confidence and decided to consume less than the group with less average income but with a high confidence.We were also talking about our gross income,not our disposable and real income.People that have more disposable income will be the one to spend more.The behavior of people in each income groups are absolutely different.Some people wanted to consume more,some wanted to save more.People with more children will also spend more for the sake of their children and the sake of their family.If these income groups have different age range will also make a big difference in the spending pattern of these income groups.Adults with families would spend more for their cost of living because now they need to pay more money for their family to survive.It's certainly more spending than when they were young and still living alone,they only needs to pay 1 human's cost of living.Thus the spending differs between each age range.People also consume because of the utility of a product.If the product has high utility then people would buy it.This is called wants satisfying power.Spending patterns also differ between each income groups because of the wealth they own.A guy with high amount of wealth will have more confidence when consuming than a guy with a bit amount of wealth.The guy with more wealth would feel more secure because of all the property they own.The guy with a bit amount of wealth would feel insecure.The interest rate also effects the spending patterns of different income groups.If the interest rate of saving is more then the guy would save.But if it's low,the guy would spend more.He would think that he'd rather spend than save with low interest rate.The availability to spend also differs between income groups.Thus the spending pattern differ.An income group may have no less things to spend on rather than an income group with more things to spend on.Lastly,the occupations of each income groups are different.People with a high-paid occupation will result in a high disposable income and will spend more.People with less-paid occupation will result in a low disposable income and will spend less too.For example a doctor would earn more than a cleaner.Their spending pattern would be very different.All these factors or conditions affects the spending patterns of different income groups.The behavior of a person started to change because of all this and they changed.If they formerly save more than they spend,these conditions may change their behaviors.Now they will spend more than they save.It all comes down to the willingness of someone to consume.
ReplyDeleteJovan Pan 8A
Gross income is the very first income we earn from the job we work and it got to be deducted by the taxes for government which after that is then our disposable income. Taxes is very important in a country because it provides many public facilities and subsidies to the vulnerable citizen, therefore everyone should and must pay taxes on time. Disposable income is again the final income we can keep and to decide whether to spend all of them, to save or to lend it to someone else.
ReplyDeletePeople who are rich, have a great job and recieves a very high wage would spend more than saving. Because they have the enough money to buy the goods now. These people save money in a very low amount, for example a rich person earns $200 000 per month, then saves $95 000for future education for his children, the rest were spent on foods and many tertiary stuff, like a LCD TV, a sportscar, diamonds for his wife, gadgets, home theater set, other ornaments, expensive plants and exotic fishes, and exotic pets, etc
Most consumers’ today have the propensity to consume, which means the willingness for them to consume goods and services with a rise in income is increasing. As well as technological advancement, people start to be interested in the latest modern gadgets and equipments like Apple products, Blackberry products, Samsung products and many others. With more education, research and health information, the behavior and their social attitude have changed gradually.
Wealth represents consumer’s amount of material possessions. For majority of people, wealth may be in the form of shares, properties, or even savings in banks. The role of wealth in consumer’s spending pattern is somewhat great. For instance, when people hold a greater amount of wealth, they are more likely to spend more to satisfy their necessities and desirables.
Interest rate is the amount charge by lender to a borrower for the use of assets and is usually expressed in percentage. Interest rate plays a role in shaping consumer’s expenditure patterns. Lower interest rate makes it easier for people to spend and borrow money, as lower interest rate means consumers will be spending less on the interest costs, leaving them with more income to spend with.
There are 3 income classes; the upper class, the middle class, and the poverty level. Everyone’s expenditure patterns are, as a matter of fact, affected by all the factors above. All 3 different income groups obviously have different purchasing power as they have different amount of income, leading to the different spending patterns.
The increase and decrease of income level affects most of the consumers’ expenditure patterns as it is very clear that the wealthier a person is, the more they will spend. However, there are still many reasons beside only the level of income. Different countries have different consumers’ spending pattern because of their social attitude and technological advancement which influence them. There are also countries which the poor are far more than the rich, which results in slow development in the economy and lower consumers’ expenditure patterns. In addition, it is very important and essential for the government to take note of the country’s consumer’s spending patterns.
Different income groups have different spending pattern. This happen because there are some factors, such as depend some of the condition of that people (rich or poor), financial mentality, desire vs ability to attain luxury, maybe they want to save more than spending, they’re consumption is greater than saving so they do borrowing, they’re purchasing power is different, and they have different behavior. There also some other reason, which is the gross income, such as wages, income, and their salary. We will discuss more about this in the next paragraph.
ReplyDeleteThe first common reason is they have different gross income, they have different income, different wages, and different salary. This make direct tax to create disposable income. Disposable income include spending and saving. There are several factors that influencing in spending pattern, such as their income, their wealth, consumer confidence, and their interest rate. We will start with income, people get income to buy goods and services to fulfill their needs and wants. There are 3 types of income groups, such as, upper, middle, and lower class. People with higher income will likely to spend more money because they think that they can buy goods and service to fulfill their needs and wants, because they can fulfill their needs and wants, they will buy luxury needs and luxury needs are expensive, such as expensive car, bag, shoes, etc. People with less income will likely to save more, because they need to save money for their needs and wants for tomorrow (in the future). Second, is depend on their wealth. If they’re wealth or rich they will spend more, because they already fulfill their needs and wants so they likely to spend for other expensive goods. Third, is depend on consumer confidence. They will likely to buy goods for their stock, so they will spend more. And the fourth is about the interest rate. Interest rate is a cost of money. When interest rates get too high, consumers stop spending on luxuries and buying other goods. at first it's a slowdown, but then consumer spending becomes really low. And when the interest rates are low, the consumers spend like crazy.
There are some reason that makes people changes in consumption. First, rise in real income, level of income adjusted for inflation. If people have rise in their real income, they will spend more. Second, people work less hour, but they earn more money, so it’s their benefit. And they think is speding to buy goods and services. Third, social attitudes has changed. It depend on their behavior, affect the social expetation. Fourth, more technology advancement. With the new invantion, people likely to buy or spend their money for the most modern technology. Fifth, health conscious. So it brings many people to spend less money on cigarettes (for smoking).
In conclusion, different income groups have different spending pattern because of some reasons, such as depend on their income, their wealth, consumer confidence, and the interest rate. That factors make people change in their spending pattern.
Vienetta Christina
8A
Every people have different income but some of them are the same. There are different income groups (upper, middle, and lower class) have different spending patterns. They don’t have the same amount of money so some of them must save less and spend more. The reasons are because they have some economical problem like they must buy food. They must spend for their family too like buy a new computer, buy a jewelery for the wife, and so on. Maybe the poor will spend less because the food maybe more expensive. It’s depend on the people if they want to buy it or not. The spending is depend on the factor like income. The higher income the higher spending. The other is the consumer confident. If the consumer sure to buy the goods they will buy the goods but the factor can be changed with the consumer like the rise in inflation. The higher the cost of goods and service the consumer will not buy it. The other is social attitude change. Now iPhone 5 is popular this year but the next year iPhone 5 will be not popular next year because there are new gadget next year.
ReplyDeleteThe other is because the job the person. Some person got a higher wages than other so he/she maybe spend more than the other. The young spend less money than the adult because the young have less money than the adult. The young doesn’t spend so much because the young only buy a cheap goods like eating at the McDonald, go to cinema and buy ticket, buy a new computer games and the other. The adult spend more money because they have more money than the adult but the adult spend it for household goods like paying a electricity, paying a gas bill, and spend the money for the business.
Some of the reason is because they want to save the money than spending the money. The reason they want to save is for the emergency. This could cover an unexpected car repair and if the dad suddenly fired the family still have some money to spend. They also save for the future consumption. They will save the money for the kids school fee because they will use the other money for saving. The other reason why people save is the interest rate will increase and the money will increase for example if they save $10000 now and then the next month they will get $15000. The other is for future consumer goods. They will save today and they will spend it for next year to buy a expensive goods and service,
Some people have different spending income is because the money. If they have the same amount of money they will have the same spending patterns and the spending patterns will not change so that why they have different factor. So the conclusion of this discussion is that people have different spending factor because of some of these factor and reason.
When people work, they will earn money. The money they have got will be used for three things. These three things are spending, saving, and borrowing. Spending is needed for satisfy our needs and wants. Another term of the words ‘satisfy need and wants’ is utility. We can make a definition that utility is a want satisfying. And want satisfying is a power of a commodity. As we can see, people get salary with a different amount. Because of that, they will spend and save money with a different amount also. Another term of it is a different income group have different spending patterns. There are three types of income groups. These three types are rich groups, middle groups, and low groups. Now we will discuss why they have different spending patterns in the next paragraph.
ReplyDeleteRich groups are usually skilled workers. Of course, they have higher income. Most of them or maybe all of them have primary and secondary needs that already fulfilled. They will pay anything for themselves’ wants. Of course w know that the utilization of rich groups are higher than other groups because of they can pay anything that they want. They never think how many their money will be used, as long as their wants satisfying are fulfilled. The example of goods that have strong utilization is gadgets. It has a strong utilization because their proudness of the certain expensive goods that they can buy. It also can be that they are prestige with their friends that work with them. Of course they also will buy all things with high quality, or the branded goods one. For women, they buy jewelries that have high price. Also they will buy and make villas, apartments, etc. Rich groups are including CEOs, business people, managers, president, artists, etc.
Middle groups are usually semi-skilled workers. These groups are between low groups and rich groups. Their income is ‘enough’ for them. For most of people in these groups, they already can fulfill their primary needs. The utilization of this group will be in secondary part. It is something that can support their life. Examples are hand phone, television, car, etc. however it’s not as expensive as rich group. It means that it is not the branded things. Middle groups are including teachers, entrepreneurs, nurses, etc.
Low groups are usually unskilled workers. Their income is quiet low. For these groups, usually they can’t fulfill their primary needs. It can be place where they live, or what will they eat, or what should they wear.
Also if they have changes in their income (for increase income), they will be spending more. And also if they have changes in their income (for decrease income), they will be saving more.
As we can see from the differences between the three different groups, technologies that increase rapidly might affect the spending money patterns. People might used the money more on technology.
So the conclusion is different group incomes have different spending patterns of some reasons.
Income is money received on a regular basis for work or investment. Gross income is income that has not been deducted by direct tax (i.e. income tax), whereas disposable income is income after being deducted by direct tax. The word disposable means “intended to use once” – money can only be used once, to save or to spend. Income, specifically disposable income, is one of the factors that determines the spending patterns of an individual. Different income groups have different spending patterns.
ReplyDeleteGenerally, higher income groups tend to have higher expenditure. The more a person earns, the more his consumption of goods and services is. This is driven by the human nature to never be content with their current conditions and wanting more. This is the reason behind why people buy goods and services. They do as it gives utility, the want satisfying power of a good or service, to the consumer. Income and expenditure has a positive relationship. Different income groups have different habits, interests and needs. For example, a larger percentage of the incomes of low-income households is contributed to housing, fuel and power rather than the percentage of the incomes of high-income households, although the amount spent for the good or service might be higher for richer households. The most striking example is the purchase of alcohol and tobacco. Low-income households spend a larger percentage of their income to this compared to high-income households, but cigarettes purchased by them are much cheaper than the wine and cigars rich households purchase.
Through income levels, households (especially in the US) are divided into upper, middle, and lower classes, although there is no specific basis or mathematical measurement for this. To be more specific, there are lower middle classes and upper middle classes inbetween. Upper class households usually have jobs such as investors, directors, entrepreneurs, or just inherited money from their parents. They are consider the 1% or 5% of the US population. These households make approximately $150,000+ a year (the 5%), or over $250,000 a year (the 1%). Households with inherited money are referred to ‘old money’, but households who have to work hard to earn their wealth are usually referred to as ‘new money’. The middle class can be split into three categories: The upper middle class, making the majority population of the US, which is male-dominated, earn a high income of $100,000 or more, and consists of well-educated, white-collar workers. Below the upper middle class is the lower middle class, earning around $32,500-$60,000. These people normally have college education, but do not have the degree to work in higher positions. They consist of lower-level white-collar workers. At the bottom is the working class or lower, who are the blue-collar workers, having jobs such as factory workers, police officers and truck drivers. They do not have a high level of education, and are often paid hourly, with salaries ranging from $23,050 to $32,500, just above the poverty line. People below the poverty level are those who are unable to fulfill basic needs such as food, clothing and shelter. The US Census Bureau estimates around 15% of the population is below the poverty level, around 42 million people.
These people would have different spending patterns, where the lower class would spend more on basic needs while the upper classes spending more on leisure. The reason for this is because upper class households simply have more money to spend. Basic needs, such as housing, food, clothing, do not take up much of their income. The money they have left would either be saved or used to buy luxury goods, such as expensive sports cars, houses, or holidays to expensive places. The lower class, in contrast, do not have the money to do so as they’ve contributed a large percentage of their income on basic needs.
In conclusion, different income groups have different spending patterns because they have different lifestyles. High-income households are more drawn to spending on entertainment, leisure, and luxury goods as they have enough money to do so, while low-income households are more likely to spend on food, housing, fuel and power as they must fulfill their basic needs before satisfying any other wants.
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