Acumen Insights

Millennials Spend More on Needs Than Wants

By November 18, 2016 No Comments

Research from Gallup showed that the millennial generation spends an average of $85 per day and accounts for 28 percent of all daily per person consumer spending in the U.S. This number is expected to climb as high as 35 percent over the next 15 years. The U.S. economy has been recovering at a slow pace, with young adults’ spending hit hardest. Gallup’s report showed that in 2008, Americans aged 19 to 35 spent an average of $98 per day. Today, in that same age group now, average daily spending has fallen by $13. Among older Americans, spending is close to—if not on par with—2008 levels. Perhaps because of their lower wages and higher amounts of student debt, Millennials have been unable to catch up to 2008 spending levels, while older generations are less likely to have those constraints.

However, there is positive spending momentum among Millennials. Across all generations, fewer than four in 10 Americans (37 percent) said they are spending more than they were a year ago, but a larger proportion of Millennials (42 percent) said they are spending more. It is worth noting, though, that Americans—Millennials included—are spending more on things they need than on things they want. More Millennials reported spending more on nondiscretionary categories such as: groceries (52 percent), utilities (37 percent) and healthcare (35 percent), while fewer reported spending more on discretionary purchases such as leisure activities (33 percent), travel (26 percent) and dining out (26 percent).