Needless to say, there are a couple of key differences in their spending habits compared to previous generations. While they might be more inclined to shop online, one of their biggest monthly expenditures is dining out. So, before you judge them too harshly for being glued to their screens, they still know how to socialize in person. Also, for them, it’s not all about self-indulgence, which you may have come to believe. To them, social responsibility matters more than price. And, before you think that it means that they’re quick to part ways with their money, they’re big on saving too. There are truly many interesting facts and figures on the millennial generation. We’ve scoured the web and found the following 20 statistics give a good overall summary of their spending habits in the past year.
Millennial Spending Habits Stats:
1. There Are Over 70 Million Millennials in the US
According to data shared by Statista, in 2020, there were 72.26 million millennials in the United States. It works out to nearly 22% of the US population. In short, millennials are regarded as anyone born between 1981 and 1996. In 2020 the global population of millennials is approximately 1.8 billion with the population spread across various regions. Till recently, baby boomers (those born between 1946 and 1964) were the largest generation group. Though, in the past decade, their numbers have decreased by almost 6 million.
2. More Than 90% Are Employed
The unemployment rate for people ages 25 to 34 in 2020 in the United States was lower than 10%. If you break it down further, it was the highest (9.5%) for people ages 25 to 29, while for people ages 30 to 34 it was 7.4%. On a side note, though, it declined steadily for the past decade and in 2019 it was the lowest that it’s been since the turn of the millennium, but in 2020 the levels more than doubled for both these two age groups. Much of this can be attributed to the COVID-19 pandemic. About 12% indicated in a survey completed by GWI that they were temporarily laid off or placed on furlough, while 7% have lost their jobs. According to data shared by GWI, 19% of millennials hold a managerial role.
3. Millennials’ Spending Power Is $2.5 Trillion
As of January 2020, the spending power of millennials was estimated at $2.5 trillion annually by YPulse. A survey that was completed eight years ago forecasted that by 2020, US millennials would spend more or less 1.4 trillion US dollars (about 30% of retail expenditure). So, the power of the millennial generation clearly surpassed expectations.
4. Millennials Are Spending More in 2021 Than 2020
A survey completed by Clutch reveals that almost half (48%) of younger millennials are spending more money in 2021, especially the first half, than the previous year. Reasons for this increased spending are to make up for time lost and the easing of pandemic-related restrictions.
5. About a Third Uses Buy Now, Pay Later
According to data shared by Statista, more or less 30.3% of millennial digital buyers were expected to use the Buy Now, Pay Later (BNPL) option in the US in 2021. On the other hand, nearly 37% of Gen Z digital buyers were anticipated to use this payment method for the same period. It’s expected that during the next two years the use of BNPL will steadily increase. Then, after 2023, it will continue to increase, but at a much slower rate. Clarity of interest rates and fees was the main reason why more millennials turned to BNPL. On the other hand, credit cards were preferred for the convenience and rewards that they offered. However, according to data shared by Forbes, over 65% of millennials actually don’t even have a credit card.
6. Saving Is Actually a Priority
Before we look at how and on what they typically spend their money, there’s one misconception that needs to be cleared – millennials actually prioritize saving money. According to the 2020 Better Money Habits Millennial Report, almost 75% of millennials are saving as much as 10 percentage points in two years. What’s more, about 25% of millennials who are saving have already set aside $100,000+. A closer breakdown reveals that the majority (75%) are saving for retirement, while 51% are saving for an emergency fund. While about a third are saving to buy a property, it’s slightly less important than travel with 42% indicating that they’re saving to travel. Yet, not all millennials care about their savings. In 2020, about 27% have indicated that they still need to start saving money.
7. Increasingly More Millennials Choose to Live With Their Parents
For the past five years, the number of millennials ages 25 to 34 who live with their parents in the United States have increased. All in all, men are more inclined to live with their parents with almost a quarter (22%) of men in this age group indicating that they still lived with their parents. On the other hand, only 13.4% of women in this age group stated that they lived with their parents.
8. Their Biggest Expense Is Food
According to YPulse’s calculations, groceries were their biggest monthly expenditure. More than 80% indicated that they spent the most money on groceries. What’s more, about a third of millennials in the US anticipated that they would spend more on grocery delivery services in 2020 due to the COVID-19 pandemic. The second top monthly expenditure was dining out or take out, followed by auto maintenance. As a matter of fact, according to a survey completed by Clutch, during the peak of the COVID-19 pandemic, about 50% of millennials continued to eat out one to two days per week. While these numbers make it clear that millennials enjoy spending money on food, millennials spent less on alcohol than the previous year, according to YPulse. The only other category on which they spent less was clothing, shoes, and accessories, but that dropped by only 1%. However, on the other hand, other online data suggests that millennials might in fact have spent more on alcohol, particularly beer and wine, in 2020.
While they might be spending a lot on dining out or take out, healthy food and non-alcoholic beverages were preferred over microwave meals and alcoholic beverages. About a third of millennials indicated that they were most likely to spend more on healthy food and non-alcoholic beverages. On the other hand, only about 26% were most likely to spend more on microwave meals, while only about 24% planned to spend more on alcohol in 2020.
9. Self-care Drives Their Spending Habits
As of February 2021, more than two thirds of millennials (70%) indicated that they planned to spend more on leisure services and products to treat themselves. To put this in perspective, only about 33% of baby boomers planned to indulge themselves.
10. Societal Impact Matters
Millennials might be guilty of a little self-indulgence, but that doesn’t mean that the welfare of others are ignored. According to the Deloitte Global Millennials Survey 2020, 60% of millennials shared that they’re willing to support a big business that took care of its employees and made a positive societal impact during the pandemic. However, almost 80% indicated that once the pandemic eases, they’ll put in more effort to purchase services or products from local, smaller businesses. It’s not just societal impact that matters, but also the impact on the environment. Nearly 40% of millennials revealed that they have started a new relationship (or strengthened an existing one) with a business if its services and products have a positive effect on the environment. What’s more, about a third have actually stopped supporting a business if they thought that the brand was doing more harm than good to the environment. All in all, millennial consumers are more concerned about ethical implications than price.
11. Gaming Is Important to Them
According to research shared by GWI, gaming virtually impacts every aspect of their lives. Truth be told, gaming has always been a big part of their lives, but the COVID-19 pandemic has meant that they spent even more time gaming. According to research completed in Q3 2020, nearly 40% of millennials in the United States and the United Kingdom have shared that since the pandemic they’ve started to play video games more.
12. PlayStation Is a Favorite Brand
The study also revealed that men tend to prefer gaming brands, while women prefer retail brands. All in all, online data reveals that millennials are the most brand-driven. Almost a third confessed that they’re always on the lookout for brand names when shopping online.
13. Home Furnishings Are a Big Priority in 2021
A survey that was completed at the beginning of 2021 reveals that the vast majority of millennials (88.2%) planned to buy home furnishings in 2021. To put this in perspective, only 60% of baby boomers had the same plans.
14. Nearly 40% Plan to Spend Less on Pet Supplies
While millennials spent more on food for themselves in 2020, 37% of millennials who participated in a survey in 2020 indicated that they planned to spend less on pet supplies. To put this in perspective, only 18% of baby boomers stated that they planned to cut their pet supplies expenditure. Yet, a survey completed in 2020/21 found that in the United States millennials accounted for the biggest share of pet owners. Almost a third listed themselves as pet owners.
15. Almost 30% of Millennials Plan to Spend More on Streaming Services
In 2020, they might have to cut what they spent on pet supplies, but at least they made sure that the family would be entertained. Two surveys that were completed in March 2020 revealed that 26% of this generation group indicated that they planned to spend more on television or movie streaming services. With regards to music streaming services, only 18% stated that they planned to increase their spending.
16. Online Shopping Is the Most Common Among Them
According to data shared by Statista, as of May 2020, online shopping was the most common among millennial internet users. The vast majority (86.2%) were digital buyers. This shouldn’t really come as a surprise considering that they’re regarded as tech-savvy. Perhaps more interestingly, approximately 30% of millennials have indicated that they’ve increased their online spending because of the COVID-10 pandemic. However, this increased spending was mainly driven as a way to maintain their mental health and not necessarily purely because of consumerism. Yet, data shared by Jungle Scout, reveals that the convenience of not having to leave your home was not the most popular reason why this generation preferred online shopping. Instead, fast shipping and product options were identified as the main reason why they opted for this route. Another reason why they prefer online shopping is because that way they can read reviews posted by other consumers, indicating that social proof works.
18. Only 15% Plan to Buy Goods In-store This Black Friday
A survey that researched the shopping behavior of UK consumers regarding Black Friday and Cyber Monday found that only 15% of millennials planned to buy in-store. This is more or less the same for Generation Z with 16% indicating that they’ll rather go to a brick-and-mortar store. When comparing the preferences of men versus women, there’s no real difference. Only 2% more men indicated that they would prefer to visit a physical store. On the other hand, millennials in Spain and France were more likely to shop at physical stores. About 28% of Spanish and 24% of French millennials stated that they planned to shop in-store on or around Black Friday. Whether they plan to shop online or in-store, compared to older generations, UK millennials were actually not planning to spend a lot of money on Black Friday. According to a survey, baby boomers and Generation X are expected to be the biggest spenders in 2021 and are planning to spend about ￡310 and ￡339 respectively.
19. North American Millennials Expected to Spend the Most This Holiday
Over in the US and Canada, it’s anticipated that millennials will spend the most this holiday season. According to data shared by Statista, the average Canadian millennial will spend about 1,600 Canadian dollars during 2021’s holiday period, while the average US millennial will spend about 1,646 US dollars on average. On an interesting side note, it’s not only drunk-dialling that’s a thing. Millennials spent on average 475 US dollars when shopping while intoxicated in 2020. They spent only $45 dollars less than Generation X consumers who were the top spenders when intoxicated. Though, they might not be the biggest spenders, but it’s more common behavior for them. A survey completed in September 2020 revealed that more or less a third of millennial consumers have made at least one purchase while they were intoxicated in the past year. Most of the time, they spent their money on food, followed by clothing and cigarettes.
20. British Millennials Spend About ￡30 Per Person
Another holiday during which millennials spend more than other consumers is Easter. According to data shared by Statista, millennials and Generation Z spent the most. On average, they planned to spend about ￡30 per person in 2021. To put this in perspective, other generations were planning to spend about only￡20.
Wrapping Things Up
With over 90% of US millennials employed, there’s a very good reason why their buying habits have come under the spotlight. Not only do they have the buying power, but their opinions also matter considering that almost a fifth of them occupy managerial roles. All things considered, there are a few key things that stand out that marketers can put to good use. Food and personal care products are some of the things that they love to spend money on. Also, while their loyalty to brands is remarkable, increasingly more millennials are concerned about the social responsibility of their purchase decisions. Oh, and if you can throw in anything gaming-related, you’re sure to get and hold their attention.
