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Jan 09 2020
It’s true that Millennials have struggled financially compared to other generations. But young consumers’ finances are not a story of purely gloom and doom. Millennials could be the richest generation in American history when they inherit Baby Boomers’ wealth, according to a study by Coldwell Banker Global Luxury, According to Canaccord Genuity’s chief strategist their growing households and comfort spending despite their debts is actually keeping the U.S. out of a recession. Already they’re outspending older consumers in many areas, and their buying preferences have the power to make or break industries. Meanwhile, Gen Z is are influencing their households’ purchases at incredibly young ages, and now they’ve aging into their own direct spending as well. So what does that spending look like? We used our most recent finance and spending survey to break down the spending power of young consumers—and what they’re spending on this year:
Currently, Millennials have significant spending power: an estimated $2.5 trillion annually by YPulse’s latest calculations. One expenditure they aren’t afraid to open their wallets for: food. Groceries and dining out/fast food/take out are currently their top monthly expenditures, and they’re reporting spending even more in these categories this year than they did in 2019. Whether it’s their love for experiences, their affinity to reach maximum health, or just indulging in the name self-care, Millennials will continue to lean into their foodie status in 2020. Millennials are also spending more on groceries, household items, auto maintenance, and pet care than they were early last year, making their adult status clear. While many could continue to delay big ticket milestones, paying off their debts and purchasing a house are top goals for the generation, according to YPulse’s life milestones survey. One expenditure category that isn’t growing at the rate of others for Millennials, is apparel. The Less is More movement has evolved into cleaner closets for older consumers who have been inspired by Maria Kondo’s decluttering, are budgeting even more when it comes to clothes, and are finding ways to help the environment from their own homes. And these days, there are alternatives to updating closets without actually buying clothes (hello, monthly rental services).
Gen Z teens (13-18-year-olds) are wielding a massive yearly spending power of their own at $34 billion. While their younger ages may limit them financially, teens are receiving an average of $115 in spending money every month and the majority of 19-37-year-old parents say they are influenced by their kids’ request when purchasing items for them. Fashion is Gen Z teens’ top monthly expenditure, and this generation is spearheading the latest fashion trends, from Cult of Ugly to ‘90s nostalgia to Brandoms. The industry has been racing to reach these young consumers more than ever through marketing campaigns on niche teen-driven networks like TikTok and Fortnite. Teens are also following in Millennial footsteps and spending more on food. With their monthly spending on dining out/fast food/takeout and groceries increasing, we could have another generation of foodies on the rise.
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