What makes you happy? Would you rather spend your money on fancy gadgets, designer clothes, and luxury cars. Or would you prefer to travel to a new destination, try out different cuisines, or attend a concert? While the previous generations may have valued material possessions as a sign of success, millennials (born between 1981 and 1996) are quite different from other generations.
Experiences versus things
Unlike previous generations, millennials are more interested in acquiring experiences than possessions. They would rather spend money on travel, concerts, dining, and other activities that offer unique and memorable experiences.
This shift in priorities is driven by several factors, including the desire for social connection, personal growth, and adventure. In contrast, millennials are less interested in owning a house or buying a new car. They prefer to spend money on activities that create memories and stories to share with others.
Social media is a major influence on the spending behavior of millennials. Members of that generation prioritize social value over material value when making purchases, with 61% engaging in experiences solely for the purpose of sharing on social media.
They are more likely to post pictures and updates about their experiences on social media platforms, which creates a sense of competition among their peers. This motivates them to invest in experiences that are unique and memorable. Also, social media has made it easier for millennials to discover new experiences and share recommendations with friends and family.
The role of the gig economy
The gig economy -- a flexible labor market characterized by freelance work and short-term contracts -- has emerged as a significant source of income for millennials. This has enabled them to earn money while pursuing their passions and interests, which often include experiences. They are more likely to invest their earnings in experiences than in tangible assets.
Impact on businesses
Millennials are now the largest generation in the workforce and are slowly becoming a significant driving force in the global economy. The unique spending habits of millennials, therefore, have significant implications for businesses that target this demographic.
For marketers, the secret to success lies in promoting sharable memories associated with their products rather than focusing on the product's material value. Since millennials place greater importance on the social value of a purchase than its material value, companies are adapting their products, services, and marketing strategies.
Enjoying experiences without breaking the bank
Although millennials are at the forefront of the experience-first movement, baby boomers are following suit. More and more retirees embrace the "less is more" outlook and prioritize relationships and experiences over material things.
As people continue to prioritize experience spending, how do we balance that with the need to save? It's all about being responsible with your money. The first step is to set a goal: Think about the experience you want and how much it will cost. Once you know the amount, start creating a budget tailored to your lifestyle.
Then, automate your savings with a separate account, such as a high-yield savings account, and schedule automatic transfers. High-yield savings accounts can offer competitive interest rates, allowing you to earn more on your savings over time.
If you are a responsible credit card user, take advantage of credit card rewards programs. You can earn points or cash back on everyday purchases, which can then be redeemed for travel purchases, entertainment, or even statement credits.
The spending habits of millennials are closely linked to their values and priorities. They prioritize experiences over possessions, and are heavily influenced by social media. Creating memorable experiences doesn't necessarily mean draining their checking accounts, either. Remember, saving for an experience is not just about the destination, but the journey as well. Stay motivated by sharing your progress with friends and family and celebrating those small milestones along the way!
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FAQs
Experiences versus things. Unlike previous generations, millennials are more interested in acquiring experiences than possessions. They would rather spend money on travel, concerts, dining, and other activities that offer unique and memorable experiences.
What do millennials spend their money on? ›
Fashion aside, well-off millennials are also spending on smaller luxuries, such as high-end bedding, flight upgrades on vacations, and nicer hotels — or something as small as fancier soap.
How are the millennials different from other generation? ›
Technological Savvy/Impact
Because Millennials grew up with these new technologies, they depend on technology more than Baby Boomers and Generation X do, and the technology even becomes part of their life. Additionally, they use online social networks, such as Facebook, Twitter, and so on (Sa'aban et al., 2013).
Why do you think millennials spend less than other generations in most categories? ›
Younger people are spending less because they have less money to spend, the Fed concludes. "Millennials are less well off than members of earlier generations when they were young, with lower earnings, fewer assets, and less wealth," write authors Christopher Kurz, Geng Li and Daniel J. Vine.
What do millennials value the most? ›
Millennials embody a set of evolving values and aspirations that greatly influence their choices and behaviors. This generation highly values authority, achievement, and influence, demonstrating a strong desire for control, success, and recognition.
Do millennials spend more than other generations? ›
More than 80% of millennials budget, compared to two-thirds of older generations. Millennials are delaying home ownership, cutting back on alcohol and tobacco and spending more on public transport and private health insurance. they spend, compared to 28% of older Australians.
What do millennials need the most? ›
Millennials want to see their (near) future. Provide room for growth within your company so they do not feel they need to grow somewhere else. Provide continual learning opportunities. Millennials have a strong desire to learn and acknowledge they have things to learn.
How is Gen Z different from millennials? ›
Generation Z vs Millennials: Key Takeaways
Members of Gen Z are more concerned about the cost of education (21% of respondents), compared to Millennials (13% of respondents). Millennials value stability (34%), while Gen Z puts more of an emphasis on finding their dream job (32%).
What makes millennials better? ›
Millennials stand out from other generations for being confident using new technology. 46% of millennials say this, more than any other generation, even Gen Z, who've never known a world without it. This confidence extends to AI with 45% of millennials saying they're excited about it.
What is the difference between younger millennials and older millennials? ›
Younger Millennials are for this purpose defined as those born between 1990 and 1996, while older Millennials are born between 1984 and 1989. For example, how do Millennials at different life stages (e.g. university aged versus those starting young families) think differently about their careers and work-life balance?
Millennials trust others' opinions online. Therefore, beyond the price of online offers, customer reviews are a crucial purchase factor, making social media key in the Millennial shopping journey, as platforms are ripe with short-form video content reviewing specific products and brands.
How are millennials affording life? ›
Millennials and Gen Zers are pulling in bigger paychecks, but much of their spending power is fueling short-term purchases like groceries and vacations, not savings. Young adults' wealth is growing, but they're still living and spending in the here and now.
Are millennials doing better than previous generations? ›
But even just looking at market income, Millennials in their late 30s were still 14 percent better off than Gen Xers at the same age. What explains the slowdown? A key factor behind slower income growth for Gen X and Millennials is stagnating work hours.
How are millennials different from other generations? ›
Compared with previous generations, Millennials – those ages 22 to 37 in 2018 – are delaying or foregoing marriage and have been somewhat slower in forming their own households. They are also more likely to be living at home with their parents, and for longer stretches.
What are millennials biggest expenses? ›
Millennials are spending a lot more on healthcare and rented housing. Health-insurance spending stands out between the average adult aged 25 to 34 in 1989 compared to 2022.
What is unique about millennials? ›
This generation, however, is also known for being adaptable. Indeed, they are considered the first digital generation, quickly acclimating to new technologies, including smartphones, social media, and streaming entertainment. They are the generation that has received the most formal education.
What are the shopping habits of millennials? ›
Millennials Expect More From Brands
And they are extremely loyal to brands who engage with and listen to their needs. 70% of Millennials stopped doing business with a brand after a poor customer service experience. Over 50% repeatedly buy the same single brand to solve a problem.
What do Gen Z spend the most money on? ›
46% of Gen Z spent more on fashion than anything else in 2022 (5WPR) Gen Z was the only generation to have clothing and fashion as their top spending category. 30% of Gen Z spent more on beauty and personal care than anything else, far more than any other generation.
What do millennials like to collect? ›
Fancy sneakers, baseball cards, comic books ― there are many items people love to collect. A Morning Consult survey from earlier this year suggested that millennials in particular are fans of collecting physical objects, as well as digital collectibles like NFTs (non-fungible tokens).
Where are millennials putting their money? ›
Millennials are more likely to invest in stocks — especially technology companies — than any other generation. They also favor cryptocurrencies. A Motley Fool study finds they're nearly twice as likely to own bitcoins than Gen Z and Gen X and five times as likely to invest in the blockchain than baby boomers.
