Show Me the Money: Spending Habits of Millennials
By Nicole Schlichting, Team Grow Writer
In our last article, we discussed the idea that — in general — millennials are not investing in stocks to the same extent as their predecessors. Difficulty getting on board with potentially shady companies, difficulty understanding the process and/or benefits of investing, difficulty justifying the financial cost of putting down money and letting it sit somewhere for an undetermined period of time — these are all factors in the general lack of investment coming from 20–35 year-olds. “But there is so much money being poured into the fresh, vibrant startup scene of which so many Millennials are a part! Where is it all going?” Good question. We did some digging and have tried to sum up a few of the most prominent spending habits of America’s ambitious youths — here goes:
1) Sharing, Not Buying
This is arguably one of the biggest spending trends among Millennials since the turn of the century. Rather than drop huge sums of money (that many don’t even have) on a new car, a couture wardrobe, or a down-payment on a house, Millennials have shifted towards renting or sharing their luxury items. Don’t want to buy all of your own music? Spotify. Don’t want to buy your own car? Uber / Lyft. Don’t want to buy your own designer clothes? Rent-a-runway. Not to mention the general hesitancy to buy houses and stop paying rent, which is arguably one of the biggest issues Millennials will face in the coming decades. The startups that cater to this ‘share-don’t-buy’ mindset number in the thousands and will continue to pop up as long as the demand is there (could be a while, stay tuned).
2) Stuff, Stuff, Stuff
Although we tend to be more hesitant to drop any large sum of money on one thing, our generation pours an enormous chunk of change into the retail industry. Most notable and interesting things we spend our money on? Wellness (organic food, yoga classes, etc.), clothes, makeup, uber rides, tattoos and piercings, and — wait for it — coffee. Seem pretty superficial and materialistic? That is partially a result of the pressures being imposed upon us by social media.
Being constantly barraged by pictures of your friend’s brand new apartment on Facebook is the contemporary equivalent of enviously glaring out the window with binoculars as your neighbor pulls up in front of his white picket fence in a shiny new 1965 Pontiac GTO. Our generation has also catalyzed the growth of ‘instant gratification’ companies with same day delivery or immediate access after payment (think Netflix, PostMates, Sprig, Amazon Prime) — we like our stuff delivered right to us, and we like it to be delivered right now.
3) Technology
Where to begin. To say the turn of the century brought with it a sharp growth in the tech industry would be a gross understatement; we are living in an age in which constantly evolving technology surrounds us at every turn, where an entire world of information is accessible with the tap of a finger. For that very reason, Millennials will go to their graves shelling out cash for the most recent iPhone, or the biggest retina display TV, or the coolest new app. As a generation, we are hopelessly in love with our technology, whether it is Netflix, our phones, our apps, computers, TV’s, hoverboards, or drones. The tech industry is the one place into which Millennials are comfortable dropping their wallets with abandon, and this is unlikely to change any time soon.
In Closing
As frugal as we are, we Millennials collectively put a lot of money into the economy. Things we aren’t spending as much money on as our predecessors? Houses, marriages, babies — the price of having a family and a mortgage has gone up significantly in the last few decades, driving many Millennials to focus on other aspects of their lives instead. Though the old fashioned ‘life-checklist’ listed above may not be as relevant to the younger generations as it once was, we do need to consciously begin planning more for our future (whatever that future might hold). Interested in sustainably planning for your future? Get in touch with one of us from Grow and we’ll help you invest in a portfolio built just for you.
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