Whether they are responsible or not, the media frequently blames Millennials for many problems within the United States. More specifically, this generation tends to take the heat for many issues regarding the economy. There are numerous studies that will claim that Generation Y is irresponsible with their spending, but what are Millennials really spending their money on? Here are a few categories that have received more traction in recent years.
Who are Millennials?
First things first, what does the term ‘Millennial’ mean? If you aren’t quite sure, a quick google search can help enlighten you. Also known as Generation Y, this term includes anyone born between the years 1982 and 2000. There are more than 80 million Millennials in the United States.
A large number of Millennials spend a considerable portion of their earnings paying down student loan debt. According to an article on inc.com, 63% of millennials have student loan debt of $10,000 or more. (That article can be found here.) Hefty monthly payments coupled with average paying jobs are just two of the reasons why Generation Y often seems to be at a financial standstill. Debt is one of the main determining factors for putting off home buying and other large financial purchases.
Many Millennials are forgoing the purchase of a vehicle and opting to use car services or public transportation instead. They represent a large portion of users for services like Uber and Lyft. Most do not want the hassle of having to maintain a vehicle. Gas, oil changes, new tires and other expenses can add up quickly. Owning a car tends to adds stress to an already tight budget.
This can encompass anything from clothing to groceries. The point is, Millennials love to order things online. It has been said that this group of individuals is ‘killing retail’. However, with popular services like Amazon that offer same day delivery or 2 day shipping, it’s no wonder Millennials prefer to order online. Additionally, when shopping for clothing, Millennials have been known to try stuff on in-store and then order the items online so they pay the lowest price.
Animal care is another area for which Millennials are known for spending a large amount of money. According to an article posted on usatoday.com, “One of the shocking highlights from the survey was that Millennials expect to spend more money on their dogs over the course of the pet’s lifetime than they do on their own lifetime health care costs”. Needless to say, this could be where lots of Generation Y money is going. If you would like to read more about this, you can find the article here.
Millennials may allocate their money differently than previous generations, but that doesn’t mean they are squandering it. As with any generation, they are using their money in a way that suits them best. It will be interesting to see how these spending patterns shift our economy in the years to come.