It is no news that millennials are a unique generation with different priorities and a unique way of life. They have influenced the way we communicate and interact with the world.
However, their spending habits have been a topic of discussion recently. In this article, we will take a closer look at the way millennials spend their money.
We will identify some of the spending habits unique to this generation, including subscription services, eating out/takeout, and coffee. We will also explore the cost of convenience, which includes online shopping, entertainment and experiences, and FOMO debt.
Millennials Spending Habits
We live in an age of convenience, and millennials are taking full advantage of it. One of the spending habits unique to this generation is subscription services.
Due to their busy schedules, millennials tend to forget to cancel or underestimate how much they spend on auto-pay subscriptions. A study carried out by The Harris Poll reveals that millennials spend an average of $219 per month on subscription services.
This includes services such as Netflix, Spotify, Amazon Prime, and others. These services provide convenience and ease of access, but at a cost.
Eating out/takeout is another spending habit among millennials. Convenience and social settings are the primary keywords associated with this habit.
Approximately 37% of millennials see eating as a form of entertainment and an escape from the stresses of work and daily life. The average millennial spends $95 per week on eating out/takeout.
That being said, research reveals that eating out/takeout is not cost-effective for those trying to save money. It is no secret that millennials love their coffee.
A $5 splurge on a beverage may seem small, but daily trips add up. According to Acorns Money Matters, if a millennial were to invest the $5 spent on a latte, it would equal $21,000 in retirement.
While coffee may seem like a small expense, it accumulates over time, forcing millennials to prioritize its cost.
Convenience Costs
Convenience has an associated cost, and this is something millennials need to keep in mind. One of the most significant costs of convenience for millennials is online shopping.
Millennials shop online more frequently than any other generation, accounting for 54% of online purchases. Online shopping is convenient and provides access to a wide range of products that may not be available in physical stores.
However, this convenience has been associated with unnecessary spending. Studies show that millennials are prone to making impulse purchases when shopping online, which may lead to excessive debt.
The experience economy is another cost associated with convenience. Millennials prioritize experiences over buying products, according to a report by EventBrite.
Around 78% of surveyed Millennials chose experiences such as live events over buying tangible products. This shift towards experience is changing the way businesses approach their marketing campaigns.
Companies such as Airbnb and Virgin have tapped into the experience economy, and their revenue growth reflects this change. FOMO debt is another cost of convenience.
FOMO (fear of missing out) is a psychological response to social pressure that drives millennials to spend money they don’t have. According to a survey by Credit Karma, 48% of millennials have accrued more than $100 in debt due to FOMO spending.
Social media has been identified as one of the catalysts of this pressure. Millennials feel they need to keep up with their friends’ lifestyles, and this leads to excessive and unnecessary spending.
Conclusion
Millennials have uniquely influenced the world we live in, and their spending habits are no exception. Convenience is the driving force behind many of these habits but comes with a cost.
We’ve identified some of the unique spending habits of millennials, including subscription services, eating out/takeout, and coffee. The cost of convenience also includes online shopping, the experience economy, and FOMO debt.
Understanding these habits and costs can assist millennials in making informed decisions about their finances and lead to better financial health in the long run. Millennials’ spending habits are unique, and convenience is a significant driver of these habits.
This includes subscription services, eating out/takeout, and coffee, which come at a cost. The cost of convenience also extends to online shopping, the experience economy, and FOMO debt, which can lead to excessive debt and financial strain.
Understanding these habits and costs is necessary for making informed financial decisions that lead to better financial health in the long run. Therefore, millennials must strike a balance between convenience and cost, prioritizing their financial well-being.