Milliennials Are Big (Discretionary) Spenders
Posted On June 5, 2012
Despite the fact that Millennials have the highest rate of unemployment of any generation and are deeply in debt, they still use a big chunk of whatever money they have on discretionary and even luxury spending. According to one marketing agency, the average Millennial spends $784 a month on discretionary expenses like entertainment and eating out. According to American Express, they are the largest demographic for new purchases of technological gadgets and fashion apparel (up by 33%). They’re even increasing their purchases of jewelry (up by 27%).
In part, Millennials’ parents are subsidizing their lifestyles. Over half of them cover cell phone expenses for their kids and a majority contributes a significant amount to (>$5000/year) to their kids’ everyday expenses.
Whereas previous generations scrimped and saved for priorities like homes, cars, and investments, it appears Millennials are maintaining the “carpe diem” approach to life, preferring to spend and enjoy it now rather than wait for deferred gratification. Millennials reluctance to advance to adult stages like homeownership and starting a family are usually attributed to their “adult-olescence” and their financial squeeze. It may just be that their spending choices are either part of the cause for their “arrested development” or the result of it.