WHAT YOU NEED TO KNOW:
- According to the US Census Bureau, the millennials are now America’s largest generation.
- This young generation came of age during the country’s worst recession that’s why they had access to much less money than older generations.
- Millennials spent about $48,600 on average last year according to the U.S. Bureau of Labor Statistics’ latest consumer expenditure report.
We define millennials as those who were born from 1981 or later. More millennials are now joining the workforce so that means their spending power increases.
Since both marketers and researchers wanted to know how the millennial generation spend their income, BLS sorted their data on American spending habits by generation. The data gave an interesting insight on how the Millennials, Gen X, Baby Boomers, the Silent Generation and the Greatest Generation spend their money.
Millennials outnumber the older generations in number. In the survey, however, they only come in third after Gen X and Baby Boomers with regards to independent households because some millennials are still living in the same household as their parents.
Gen X has the highest spending habits among the generations. Millennials seemed thriftier than their older counterparts, spending less than baby boomers and Gen X in all categories (Housing, Clothing, Eating Out, Food at Home, Entertainment and All Other Spending).
When it comes to real estate, the average value of a Millennials’ home was $71,791 in 2016. That is less than half of the $181,256.04 for boomers.
What they spent the most on is housing. The average is $16,900 which could be spent on rent, a mortgage or other accommodation which accounts for 35% of total spending.
The Millenials are less likely to spend for a special occasion or a celebration spending only $541 on gifts on average in 2016, compared to the $1,401.96 boomers shell out. This might be due to this generation’s being more DIY-focused.
Looks like the younger generation prefers eating out. Millennials spent 47% of their food budget at restaurants or fast food joints. That’s a big chunk considering how much they earn. They should know how they can save hundreds of dollars by preparing their own meals at home.
Although plagued with auto loan delinquencies, Gen Y spent an average of almost $3,700 toward buying a vehicle in 2016. The good news is that about 60% of that was spent toward used cars.
Since the Millennials tend to value experiences (like traveling) over investing on a property, they are considered to be the most social and connected generation yet.