When it comes to millennial spending, this generation has the same proportion of their income allocated to some basic needs and necessities, except that they have less money to spare.
Millennials are ‘dramatically financially worse off’
A new study by Deloitte said that this generation referring to individuals born between 1980 and 2000 are “dramatically financially worse off” than previous generations.
It revealed that millennial consumers spend their money on the same things that their parents did three decades ago. The percentage of millennials’ income spent on food, alcohol, and restaurants are almost the same as those of the older generations in 1997.
The report authored by Kasey Lobaugh, Jeff Simpson, and Bobby Stephens said that the avocado toast is not the factor influencing how millennials spend their money. It is college debt and financial crisis, instead.
Put simply, the study suggested that millennial consumers don’t skip out on homeownership only to waste their money on avocado toast.
The survey done by Deloitte involved over 4,000 consumers, 200 billion credit card transactions, 450 billion points of location data, and government data.
How millennial spending behavior changed
Consumers in the U.S. aged 35 and below saw their net worth falling by 34% since 1996.
Millennials spend more on non-discretionary items, which is blamed for the escalating student debt reaching as much as 160% since 2004.
This generation is often held liable for the lackluster performance of various industries in previous years, from razor manufacturers to golf equipment manufacturers. But the new study debunks a lot of the narratives about millennials.
Millennial consumers are usually referred to as being more experience-oriented, idealistic, more narcissistic, and more socially-conscious than the Gen-X and Baby Boomers.
In a statement, Lobaugh said that the ‘consumer has not fundamentally changed’ in many ways. Rather, the growing gap between the high and low-income groups and the rise in non-discretionary expenses influence their behaviors.