December 4, 2023


business is good for you

How Millennials Spend Their Money

6 min read

Millennials get a bad rap for spending recklessly and are often teased for splurging on entertainment and traveling over buying a home and starting a family. However, these money habits are often compared to those of older generations with whom many life circumstances and priorities differ.

“The stereotype is that millennials spend their money frivolously, but the spending that might be mocked as frivolous — like greater spending on streaming services and electronics such as iPhones — may be more indicative of the times we live in than they are a sign of thoughtless overspending,” says Stefanie O’Connell Rodriguez, millennial money expert and author of “The Broke and Beautiful Life.”

Who Are Millennials?

Also known as Generation Y or Gen Y, millennials are defined as those born between 1981 and 1996. One of the key elements behind this age group’s behavioral differences from previous generations is that they were raised with technology from a young age, adopting mobile devices during their youth and using computers in grade school.

Millennials have also faced difficult financial obstacles, as many graduated with record-high student loan debt during a recession and faced challenges finding a job in their chosen career path. So it’s no surprise that millennials have different lifestyle and professional priorities and habits compared with both Generation X and baby boomers.

Whether you believe millennials make poor financial choices or not, investigating their spending patterns can provide a better understanding of what’s driving these behaviors and what really matters to this infamous generation.

[See: 10 Ways Millennials Are Changing Homebuying.]

Here’s a look at what millennials are spending more and less on.

Millennials spend more on:

— Convenience.

— Online shopping.

— Debt payments.

— Food away from home.

— Experiences and travel.

— Streaming services.

— Social impact.


Millennials value time and are willing to pay more for convenience to make their lives easier.

“Convenience is a huge reason millennials spend money because we aged into adulthood with the rise of apps for seemingly everything,” says Erin Lowry, millennial money expert and author of “Broke Millennial Takes On Investing.” “Ride shares to delivered groceries to meal kits to subscription services to ad-free programming. This isn’t to say that older generations don’t pay for these, but that millennials do put a premium on convenience in new ways.”

Online Shopping

Millennials grew up as online shopping took flight, and there’s nothing more convenient than ordering a pair of new sneakers that arrive at your doorstep a day or two later. In fact, the 2019 Millennial Shopping Report by CouponFollow, a deal site, found that millennials made 60% of their purchases online that year. But just because millennials spend more online doesn’t mean they’re spending more overall.

“Everyone is buying toilet paper, but millennials are more likely than boomers to order it from Amazon,” O’Connell Rodriguez says.

Debt Payments

According to the 2017 Generational Report from Financial Finesse, millennials owe $1.1 trillion of the country’s $3.6 trillion in consumer debt, and much of that is due to the shocking amount of student loan debt they’re carrying. Debt payments take up a big chunk of this generation’s monthly expenses.

Food Away From Home

Thanks to food delivery apps like Seamless, Grubhub and Uber Eats, ordering takeout has never been easier and millennials are biting at every opportunity to try new restaurants. According to the 2018 U.S. Consumer Expenditure Survey from the U.S. Department of Labor, millennials spent 47% of their food budget on food away from home, more than all other groups.

“We definitely like eating out and the convenience of food delivery more than our parents,” says Grant Sabatier, creator of Millennial Money, a personal finance blog, and author of “Financial Freedom: A Proven Path to All the Money You Will Ever Need.” Food delivery apps provide even greater access to takeout, he adds.

Experiences and Travel

Millennials value experiences over possessions and spend more on travel than any other age group. In fact, the State of Travel Insurance research from Berkshire Hathaway Travel Protection, a travel insurance agency, found that millennials took an average of five trips in 2018, spending an average of $5,700, a whopping $2,400 more than baby boomers.

“Millennials are focused less on getting rich and buying stuff, and more on living an awesome life,” Sabatier says. “We value loving our life over acquiring things.”

Streaming Services

Millennials appreciate ad-free streaming entertainment services that provide access to their favorite shows, movies and music when they want it, and they’re paying more for these services. According to a survey by YPulse, a youth consumer insights and advisory firm, 64% of 25- to 37-year-old streamers are paying for two to four services, with older millennials are even more likely to pay for additional platforms. However, this generation is also less likely to pay for cable TV, which can more than make up for this additional expense.

Social Impact

According to the Evolution of Retail report from Euclid, a data platform for offline attribution and store visit retargeting, 52% of millennials feel it’s important that their values align with the brands they like.

Millennials support causes they care about and are much more focused on giving back, Sabatier says, noting that his generation is donating to more causes and even purchasing from brands that make an impact.

[See: 7 of the Best Socially Responsible Funds.]

Millennials are spending less on:

— Cars.

— Clothes.

— Housing.

— Retirement.


As reported by Pew Research Center, 88% of millennials live in metro areas, so they have better access to public transportation and don’t need to spend money on a car. Plus, they have access to on-demand rides through apps like Uber and Lyft, making it easy to get around without being tied to a monthly lease or auto loan.

“Many millennials live in cities where they can rely on public transit,” O’Connell Rodriguez says. “And among those who do buy cars, the preference seems to be for cheaper, used models, rather than more expensive, new ones.”


Millennials make get mocked for making bad spending decisions, but they’re spending less on clothes than their older Gen X peers. According to the same survey from the U.S. Bureau of Labor Statistics, millennials spent just $1,979 on apparel in 2018, compared to Generation X, which spent $2,343, on average. Even when they are shopping, millennials are making sure they’re getting the best price. In fact, the shopping report from CouponFollow as cited above found that 95% of millennials search for a coupon before making a purchase and are willing to spend more time doing so.

[See: Best Buy and Sell Apps for Used Stuff]


Millennials are delaying major life milestones that trigger buying a home, such as getting married or starting a family. But that’s not the only reason they aren’t settling down. Home prices in major cities across the country have skyrocketed, making it much more affordable to rent than to take on a big monthly mortgage, which also explains why more millennials are living at home longer than previous generations. A report by Pew Research Center found that 15% of 25- to 35-year-old millennials were living in their parents’ home in 2016.

For those millennials who do settle down into a home purchase, they are getting creative about their living situations to reduce monthly expenses. Sabatier points out that “house hacking,” a strategy in which a homeowner rents out a portion of their primary residence to generate income and offset the monthly mortgage and other maintenance costs, is a rising trend among his generation.


According to a 2018 report from the National Institute on Retirement Security, 66% of working millennials had nothing saved for retirement. Considering that millennials earn 20% less than baby boomers did at the same stage of life, according to The Emerging Millennial Wealth Gap report from New America, a nonprofit, nonpartisan think tank, and employer contributions are diminishing, this generation will have a harder time reaching their future financial goals if they don’t begin prioritizing savings.

“The biggest single habit that I come across with millennials is their spending demands over their saving desires,” says Ryan Moore, founder and CEO of Kingman Financial Group in San Antonio.

Moore points out that compound interest takes time to accumulate, so it’s important to start saving from an early age, even if retirement seems like light years away. He also suggests automating retirement savings, which takes the pressure out of financial planning.

Source Article | Newsphere by AF themes.