There are a number of reasons offered here as to why those identified as Millennials are spending less on “discretionary” items and indulgences than older folks. It’s an issue that’s been covered frequently by the media in the last few years as that group gets older and seizes more of its marketplace power. So the reasons offered are going to be largely familiar: Higher education-related debt, prioritizing experiences over stuff, an aversion to credit cards and so on.
One popped out at me, though: More bills. That generation spends more on gas, food and phone bills – the kinds of things you can’t really avoid – than others. So of course they have less money for items of choice; necessities are taking up a bigger slice of their paychecks. And the price of those necessities has gone up, often faster than inflation.
As the story points out, they’re spending less on television but that’s being replaced by streaming and on-demand video services, but even there they’re sharing passwords with family and friends instead of spending on their own accounts.
That is, I think, indicative of a bigger trend that encompasses all the “Millennials are killing [fill in the blank]” headlines we’ve seen over the last few years. Namely, that they don’t feel any great driving need to personally support the kinds of companies or programs they’ve seen decimate the economy and layoff their friends, coworkers and family.
Let’s pull out another area identified as one where Millennials are spending less: Vacations. Corporate HR departments are increasingly not just looking for the most efficient routes and logistics but considering employee comfort when making arrangements. And those travelers are combining business travel with opportunities to get a little personal leisure or adventure time in as well, making the most of being in a different city to, again, spend less on “stuff” and more on a unique experience.
It remains to be seen if the mainstreaming of student loan assistance as an employee benefit – something that’s more tangible and a bit more realistic to this generation than the fungible retirement benefits that are out of their control and which they may have already used – might have any impact on those spending habits, but my guess is the answer is “no.” Their beliefs and mindsets are likely set at this point and their prospects for the future aren’t going to be getting any brighter, so they’re not only going to continue killing sexist restaurant chains established by Baby Boomers but they will raise their own kids with less of an ostentatiously consumerist approach.
All of that is reflected in a new study showing the definition of “The American Dream” has become less robust recently. Most people just want to be financially secure and aren’t even fully aspiring to home ownership. They just want to be able to take care of themselves and that kind of thinking isn’t going away anytime soon.