Obsessed With Status? Millennial Spending Habits Revealed
Ahh Millennials, the generation that is seemingly obsessed with status. Those of the era of millionaire influencers and the bank of mum and dad. With wages stagnated, house prices ever increasing, and the future of pensions looking uncertain, who’s to blame the younger generation for wanting nice handbags or holidays. Their future looks bleak, they might as well enjoy it, and then post about it on the internet.
For generations past, the ultimate goal in life has been to secure a good job, get onto the housing ladder and have a family. However, economic uncertainty in the modern age is changing that. Gone are the days where you can buy a house at 30. Factor in student debt and rising prices, and owning a home is becoming more and more unlikely. Not only are people buying homes later. They are also getting married later and having children later. Though often labelled as materialistic, many millennials feel they will not reach their material goals until much later in life.
Items such as cars and TV’s are just as important to this generation as luxury goods. The sharing economy that has developed through the growth of companies like Uber provide access to products without the burdens of ownership. By being able to access products without owning them, this leaves millennials with more money to spend on social activities and material goods. Unfortunately, though, it’s not all nice meals and clothes. Yes, millennials spend more money on socialising, and yes, they will splurge on expensive clothes or electronics, but, they are also spending more on essentials such as health care, groceries, education and fuel for their vehicles than previous generations. Today’s millennials spend around 80% of their income. In the Reagan era, 25-34 year olds spent around 91% of their income.
A large proportion of millennials are working good jobs, but many are still living with their parents. Having no outgoings for rent or mortgage repayments means that they have more disposable income. This disposable income is what they choose to spend, as opposed to saving. Around 67-72% of millennials have less than $1000 in their savings account. A worrying figure. Even though they have the money to be spending, ideally they would be thinking about pensions or savings.
With the advent and wide use of social media, there are people who buy to flaunt. One in five people say that there is no point owning nice things if other people don’t know about it. This certainly paints a negative picture of the youth of today. But, with financial milestones so far out of reach, who’s to blame them for clasping at material ones. Expensive luxuries and the instant gratification you receive for them on social media certainly provides the self-confidence boost mainly millennials crave.
With a stale economy and home ownership and employment prospects at an all time low, millennials are prioritising short term spending over long term saving. Student debt, tax, and rent taking up 1/4 of under 30’s pay checks all mean saving is a luxury many cannot afford. When it’s all looking bleak, why not just give up and go on holiday.