Millennial spending habits mirror the values of our society.
We have never lived in a more globalized, fast-paced, high consumption society. We have never had so many options. Think about it, when you go to the grocery store, how many different milk options do you have?
The internet, Google, and YouTube make information sharing easy, efficient, and fast.
We live in an age of innovation and creativity. There is no doubt, it is an exciting time to be alive.
With so many options, so much technology and information, we as a society, have a lot more resources available. This is amazing, but our attention spans are becoming shorter and we are consuming more.
Don’t tell me where your priorities are. Show me where you spend your money and I’ll tell you what they are.
Who are Millennials?
Millennials, born between 1981 and 1996, ranging from 39 to 24 years old, are getting older.
The internet, social media, cell phones, Global Climate Change, the Great Recession, and the Coronavirus pandemic play a major role in defining this generation.
Once the Great Recession hit and the unemployment rate skyrocketed, many millennials went back to school. As a result, this group is the highest educated segment of the population.
However, after finally graduating, burdened student loan debt, high costs of living, and wages not keeping pace with that cost, millennials entered into the economy. A decade later, they face a global pandemic.
Living in an age of uncertainty is not easy, being a millennial is not easy. It’s hard to watch as many millennials work so hard just to spend every dollar they earn.
It is time to stop being sucked into the high consumption lifestyle. It is time for millennial spending habits to change.
Living a high consumption lifestyle causes a lot of damage to the environment. Everything we consume needs to be manufactured, packaged, and shipped.
Online shopping causes a lot more pollution that you might think.
First, Amazon Prime’s free two-day shipping sounds fantastic. However, it causes a lot of excess pollution. Fast convenience means online shoppers are not intentional and strategic about what they order online.
For instance, manufacturing cardboard boxes causes pollution. If you have an Amazon Prime membership, and order items every few days, how many cardboard boxes is that? What do you do with all those boxes? Recycle? Recycling is great but even recycling causes pollution.
Free two-day Amazon Prime shipping means that the delivery trucks are often not fully loaded. They drive around with a few boxes in this massive truck, which emits carbon gases into the atmosphere.
My point here is not that Amazon Prime itself is bad, it is an example of a larger problem. The fact is, that millennial spending habits include a strong preference towards online shopping.
Rather than purchasing immediately, be strategic and consolidate.
A lot of online shopping is impulsive. If this is one of your weaknesses, check out my article on how to stop impulse buying.
Social media is a huge reason for designer everything to be so on trend. There are so many influencers on YouTube and Instagram posting glamorous pictures and sharing their shopping haul videos.
I love YouTube and instagram just as much as the next person, and I acknowledge, it is super easy to get caught up in the latest designer fashion trends. Especially when your favorite influencer is saying how amazing it is.
However, thankfully, I am not at all tempted by this anymore. Its just stuff. Stuff can get lost, stolen, and damaged. Do material possessions really provide happiness? To me, the answer is no, a fancy purse or watch does not dictate how happy I am.
What does affect my happiness is my level of financial independence. Would I rather a YSL purse with Louboutin shoes or would I rather not worry about paying my bills? Answer: I’d rather not worry about paying my bills.
Millennials should stop wasting money on high-end trendy fashion.
Millennial spending habits also include purchasing new cars. Millennials should stop wasting money on new cars because a new car is one of the worst, if not the worst “investment” you can make. Why? because cars depreciate so quickly.
When you walk into the dealership, the sticker price you see on the window is marked up. Some, hopefully most, of you realize this is not the price you should be paying. If you didn’t know before reading this article, you do now. Buying a car is all about negotiation. Dealerships build into the sticker price the negotiation in order to make you, as the customer, feel like you got a deal.
So you bought a new car, now what?
Once you finally decide on a car, and sign the papers, congratulations, the car has depreciated in value. You have instantly lost 10% – 15% of your car’s original value (what you paid for it). Ugh!
Once you sign those papers your car now has the “used” label. Some people, possibly yourself, will only purchase new cars. This means, if you want to resell your car, the pool of potential buyers has shrunk. This is true even if you don’t “drive the car off the lot”. Meaning, if you literally never use the car, because you sign those ownership papers, the car is now “used”. Ridiculous, right? This is why your new car depreciates so quickly.
To make matters worse, as time goes on, your car continues to depreciate very rapidly. By year two of ownership, your car will lose a whopping 30% of the original value. After three years, your car lost 40% of its value, by year four, your car lost 50% of its value, and in year five, 60%. Essentially, the depreciation rate is about 10% per year for the first five years. After 5 years the depreciation rate slows down.
Not all cars are created equal. Some cars depreciate more quickly and some less quickly. Generally speaking, brands with reputation for a strong reliability and durability retain their value a bit better (Toyota and Honda). Luxury vehicles lose their value the fastest (expensive repair costs).
Why your new car depreciates so quickly is because the moment you own it, the car is “used”.
The lesson? As much as you may love to own a new car, buying a gently used 5-year old is the most financially responsible.
Sneaker popularity has taken on a life of its own and companies, celebrities, and influencers are capitalizing on this trend in a big way.
If Yeezy sneakers were from Joe Smoe would they be as popular as they are? Are Yeezy sneakers really that special? No, they aren’t. Personally, I think Yeezy sneakers are a bit ugly. However, thanks to a celebrity name and social media Yeezys are HYPED and sell out as soon as they drop.
Having a good pair of sneakers is great, but do you really need so many fashion sneakers? If you are one of those that has a weakness for over-hyped sneakers, ask yourself why it is so important to you.
Is it better to look rich or be rich? My answer: It’s better to be rich.
I mention sneakers as a huge money waster a lot, and that’s because I honestly don’t understand why someone would spend their hard earned money on them.
Glorious, wonderful, delicious, coffee. Millennials love their gourmet coffee. I must admit, I am a millennial and I love it too. However, millennials have a bad habit of spending money on overpriced gourmet coffee.
If you are someone that wakes up early, and on the way to the office stops by your favorite coffee shop, then it is highly likely you spend too much money on coffee.
At around $4 a cup for a basic iced coffee, if you go every morning, 5 days a week, you are spending $20 a week $80 per month, and $1,040 per year on coffee. Geeze.
Now, I am not advocating giving up the gourmet coffee. However, I am an advocate of taking that same gourmet coffee home and brewing it.
Invest in a French Press and a cold brew maker for home. This is what I use and these two devices work perfectly. I still drink the premium coffee, but I buy the bags and brew at home.
In addition to saving you money by brewing at home, you are cutting down on one-time-use plastic, paper, and styrofoam cups. By simply brewing your coffee at home, you are reducing environmental pollution!
Millennial spending habits also include purchasing Fast Fashion. Fast Fashion includes cheap, trendy clothing inspired by the catwalk and celebrities. Retailers quickly stock their stores with Fast Fashion to capitalize on their popularity.
Why is Fast Fashion bad? Because manufacturing and distributing these items is horrible for the environment. Not only does Fast Fashion result in an high CO2 emissions, it also pollutes the ground water – the same water we drink! In fact, it takes 2,700 litres of water to produce just one t-shirt. That is insane!
There are a few things you can do to reduce your consumption of Fast Fashion:
- When you walk into a store and start browsing around, think about whether you will wear the item a minimum of 30 times. If you will not get at least 30 uses out of the clothing then do not buy it.
- Its about quality, not quantity. There is no doubt, Fast Fashion is cheaper than ethically sourced and manufactured clothing. If you anything like me, you are also on a budget. How can you be both friendly to the environment AND stay on your budget? Buy less clothing. Rather than filling your closet full of Fast Fashion clothing likely to get lost and forgotten about, purchase a few ethically sourced and manufactured clothing items. They are higher quality and last a lot longer.
- Buy second hand. Second hand clothing is great for saving money and you reduce demand for fast fashion. Remember, one less fast fashion t-shirt demanded means 2,700 litres of water saved. Every little bit helps!2
Expensive Gym Memberships
Millennial spending habit also include gym membership – sometimes very expensive gym memberships. I am a firm and true believer in investing in yourself which includes taking care of your health. Many people have gym memberships, including myself.
The most expensive gym memberships are often those that include fitness classes.
The two most important factors to ask yourself before joining any gym include:
- Will I actually go?
- Are there less expensive alternatives?
Be honest with yourself here because it could save you thousands of dollars. If you have an expensive gym membership, strongly consider cancelling it and joining a gym that less expensive. Your future self will thank you.
Tobacco products such as cigarettes, cigars, chewing tobacco, and e-cigarettes are a complete waste of money. It is baffling why people start these habits.
No one can deny that tobacco products are unhealthy. But picking up a tobacco habit and getting hooked on nicotine is expensive!
It also makes your clothes, house, hands, and breath smell bad. Plus your teeth get yellow.
I honestly don’t get it.
This is why tobacco products is on my list of things millennials should stop wasting money on.
Millennial spending habits also include eating out – a lot. If there is ever a reason food expenses are astronomical, it is because of eating out.
Is meeting up with a group of friends for brunch fun? Heck yes it is!
But is it good for your wallet? Nope, not even a little.
How much do you normally spend each time you go out for a meal? Chances are, between the food itself, service tax, and tip its at least $20.
Tack on alcohol and the cost to have brunch with your friends increases dramatically.
I am not saying you should give up eating out completely. It’s perfectly fine to go out to a restaurant for a meal on occasion. However, I am saying commit to making the majority of your meals at home.
Not only is it cheaper, but you have the added benefit of knowing exactly what you are putting into your body. The saying is true, you are what you eat. By eating at home you can prioritize eating healthy and reduce food expenses.
Try it out for a little while, see what its like to not go out to eat all the time. You may find you prefer a nice home cooked meal.