Being the largest adult living generation, millennial’s financial choices have caused significant changes in the labor market and business landscape. They have both inspired and thrown out various industries and products over the years. With their sheer size and influence, how and where they spend their money could be worth looking into.
Statistics revealed that millennial’s average yearly spending altogether totals around $600 billion. What’s driving behind those numbers can give us a better understanding of their financial behavior.
Hence, let’s explore further the spending habits of the millennial generation.
Who Are The Millennial Generation?
Those born between 1982 and 1996 belong to the millennial generation. By now, their ages range between 25-39 years old. According to Pew Research Center, this group is better educated than previous generations. However, they have often been labeled as materialistic and spoiled.
Despite having a reputation for financial irresponsibility, millennials also seem to experience financial melancholy. This generation feels like they won’t be able to reach material goals like buying a house. While it’s true that some of the millennials spending habits won’t certainly lead them to financial security, their financial track record isn’t entirely unpleasant.
To get a clearer picture of the spending habits of the millennial generation, let’s find out where they are spending most of their money.
More than half of millennial’s purchases are made online. They prefer to use subscription services and replace regular trips to physical stores. Although the idea of online shopping seems like thoughtless spending, it’s worth noting that millennials value time and are willing to pay more for convenience.
But even if they spend more online, it doesn’t necessarily mean they’re also spending more in general. In fact, many of them will wait for a sale or visit an online site several times before buying an item.
A big chunk of the millennial’s monthly expenses goes toward paying debts. They came of age during a time of economic crises and transition in the landscape of higher education. The costs of attending college went up significantly, causing them to accumulate a considerable amount of student loan debts.
Millennials have a penchant for dining out or spending on expensive coffee. They spend 47% of their food budgets eating out and are likely to buy a cup of coffee that costs more than $4. Even if money is in short supply, they are willing to splurge on a nice meal out. With the rise of food delivery apps, Millenials are also enjoying easy access to various restaurant foods.
For this generation, food is more than just satisfying their appetites. It’s also a form of personal storytelling and self-expression. But note that they are more concerned about healthy eating and wellness than other generations.
Millennials value memories over possessions. This means they prefer to spend their money on weekend getaways or long vacations than on material things. It’s another area where they are likely to spend their money freely.
They are even willing to accrue debt just to travel. But before they take out any loans, they gather information and visit reliable online lending sites. Worldpaydayloan.com is one of the sites they usually visit as it provides dependable information that helps them make sound decisions.
Millennials have experienced various financial events that shaped the way they spend their money and the Great Recession was just one. Many of them graduated at the height of the economic meltdown, leaving them with a feeble job market and high levels of student loan debt. As a result, millennials tend to delay major milestone purchases and take a self-directed approach to their money.
Technology also plays a critical role in millennials spending habits. But though 60% of their purchases are made online, they make decisions based on multiple sources. They know they have options, so they will search until they get the best deal. Millennials also value experiences and personalization over tangible products. They are much more likely to spend their money on services that add comfort and convenience to their lives.
Like in other generations, millennials have their fair share of strengths and weaknesses when it comes to their spending habits. They already know how to shop smart. But using proper budget management and building long-term financial goals can help them handle their money better. Despite the numerous setbacks, millennials can still have a brighter financial future.