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Millennial Matters: Charting The Spending – And Other – Habits Of The Millennial Generation

15-minute readSeptember 21, 2020

Millennials have received plenty of press, and why not? Their shopping habits are changing the way retailers operate, forcing many to scale back on traditional brick-and-mortar locations and instead embrace online storefronts. Their desire to own homes is now providing a boost to the housing market, and their struggles with student loan debt have encouraged politicians to debate ways to lessen the cost of a college education.

But are millennials that much different from baby boomers and the members of Generation X? They might be when it comes to their political beliefs and attitudes about work, but when it comes to saving and spending money? They're not as different as you might believe.

Here’s a look at the occasionally complicated relationship millennials have with money, debt and savings. You might be surprised at how similar these young adults are to their baby boomer and Gen X forebears.

Millennial Characteristics

 Before looking at the spending habits of millennials, it’s important to look at the habits millennials have as well as their priorities.

They’re Getting Older

It’s important to understand who the millennials are. Pew Research Center describes anyone born from 1981 through 1996 as millennials. This means that the oldest millennials are turning 38 in 2019. In addition, anyone born from 1997 onwards is considered Generation Z.

They're Well-Educated

According to Pew Research Center, millennials are better educated than prior generations.

  • 39% of millennials from the ages of 25 to 37 have a bachelor's degree or higher.
  • About 25% of baby boomers had at least a bachelor's degree when they were 25 to 37, while 29% of Gen Xers had earned bachelor's degrees or higher at the same age.

They’re More Likely To Live In Their Parents' Homes

Maybe it's high housing costs, their tendency to marry later in life or the college debt they face, but millennials are living in their parents' homes longer.

  • Pew Research Center found that in 2018, 15% of millennials from the ages of 25 to 37 were living in their parents' homes.
  • When baby boomers were 25 to 37, only 8% of them lived in their parents' homes.
  • Only 9% of Gen Xers lived in their parents' homes when they were 25 to 37.

They Have Different Attitudes About Parenting

According to Google/Ipsos Connect research, more than 40% of millennials were parents by 2017. The same research found some interesting facts about how millennials parent:

  • 82% of millennial dads who watch videos on YouTube do so to connect with their children.
  • 75% of millennial parents say they have continued to pursue their passions after having children.
  • A poll by TIME and SurveyMonkey found that only 19% of millennial parents have never shared a photo of their children on social media.
  • Pew Research Center found that 57% of millennial moms say they are doing a very good job parenting. That's higher than the 48% of Gen X moms and 41% of baby boomer moms who said the same thing when they were the same age.

They Like Cities

Pew Research Center says that millennials are more likely to live in metropolitan areas than previous generations. 

  • 88% of millennials live in metropolitan areas today.
  • 84% of Gen Xers lived in metropolitan areas when they were young.
  • 68% of baby boomers lived in metropolitan areas when they were young.

Millennial Priorities

They're Not As Interested In Getting Married At A Young Age

In its research on millennials, Goldman Sachs reported that these young adults tend to get married at a younger age than even the generation immediately preceding them. 

  • In 2012, just 23% of millennials from the ages of 18 to 31 were married and living in their own households.
  • Compare that with 1981. Back then, 43% of adults from 18 to 31 were married.
  • In 1968, 56% of these adults were married and living in their own household.

 They're Not Rushing To Get Married

Millennials are waiting longer to get married, too.

  • Pew Research Center found that in 2012, 23% of people ages 18 to 31 were married and living in their own households.
  • In 2007, that figure was 27%, and in 1981, it was a far higher 43%.
  • If you go all the way back to 1968, that figure was 56%.

They're Focused On Health And Wellness

Researchers have discovered that millennials are more focused on staying healthy than previous generations were. 

MonitoringTheFuture.Org found that 69% of young adults in 1998 disapproved of people who smoked one or more packs of cigarettes a day. In 2013, that figure rose to 83%.

  • The same website also found that 69% of young adults in 1998 disapproved of people who had one or two alcoholic drinks nearly every day. In 2013, 72% of young adults felt the same way.
  • In a 2013 survey, Aetna discovered that millennials were more likely to consider eating healthy and exercising as important factors in being healthy. According to Aetna, 22% of millennials counted regular exercise as part of their definition of being healthy. Only 14% of Gen Xers and 12% of baby boomers said the same thing.
  • The results were similar regarding diet. 24% of millennials said eating right was an important component of being healthy. 14% of Gen Xers and 12% of baby boomers said the same thing.

Millennials And Money

Millennials have a complicated relationship with money, but something interesting is these young adults do a better job saving money than many of their baby boomer and Gen X counterparts. They also tend to earn more money than older Americans did at the same age.

The struggle that millennials face, though? Many of them are burdened by high amounts of student loan debt. This debt can cloud the financial prospects of even the hardest-working and hardest-saving millennial.

Millennial Saving Habits

The 2018 Better Money Habits Millennial Report is an interesting one. It shows that Millennials are far better at saving their pennies than most critics think. According to Bank of America’s report, millennial saving habits are just as good, or even better, than those of former generations. 

  • According to Bank of America, 63% of millennials are actively saving. That compares favorably with the 64% of Gen Xers who say they too are actively saving, though it is a bit behind the 75% of baby boomers who say the same thing.
  • The survey found that 54% of millennials are following a household budget. That's the same percentage reported by Gen Xers and slightly behind the 57% of boomers who say the same.
  • 57% of millennials report having a savings goal, which is better than 42% of both baby boomers and Gen Xers who say the same.
  • 59% of millennials say they feel financially secure. That's above the 54% reported by Gen Xers and slightly below the 63% reported by baby boomers.
  • Bank of America reported that 47% of millennials have $15,000 or more in savings and 16% have $100,000 or more.
  • The survey also found that the top savings priorities for millennials include building an emergency fund (reported by 64% of respondents), retirement (reported by 49% of respondents) and buying a house (reported by 33% of respondents).

Average Millennial Salary

Millennials might wish they made more money. But according to Census data, millennials are earning more each year than the majority of older Americans did at the same age.

  • Analyzing numbers from the U.S. Census Bureau, Pew Research Center found that the median adjusted income in a household led by a millennial stood at $69,000 in 2017. That figure outranks nearly every other year as the highest median income for adults from the ages of 22 to 37.
  • Thanks to the longer time they've spent in the workforce, baby boomers have unsurprisingly tended to have higher household incomes, earning a median figure of $77,600 in 2017.
  • Gen Xers, though, tend to earn the most. Pew Research Center said that the typical income of a household headed by a member of Generation X stood at $85,800 in 2017.

Why are millennials earning so much more at a young age than did members of older generations? Pew Research Center pointed to two main reasons:

  • Women in millennial households work more often and longer hours than women in previous generations did. Pew Research Center said that among those who worked, 78% of women in millennial households worked at least 50 weeks of the year in 2017. In 2000, only 72% of women workers in millennial-headed households worked that long.
  • Women in millennial households are also earning more. The median earnings of women working full-time for a full year in households headed by millennials jumped from $37,100 in 2000 to $39,000 in 2017.


Millennial Spending Power

 Retailers covet millennials' dollars. This isn't surprising because these young adults have a lot of money to spend, and they’re not shy about doing so.

How strong is the spending power of millennials? 

  • Accenture predicts that by 2020, millennials will spend $1.4 trillion annually in the United States.
  • Also by 2020, Accenture says, millennial spending will account for 30% of the total amount of retail sales in the United States.
  • In 2019, First Insight reported that millennials spend an average of more than $50 on each shopping trip, more than Gen Xers or baby boomers.
  • First Insight also reported that 31% of U.S. millennials have signed up for subscription services for everything from apparel and entertainment companies to those that provide beauty products and fashion accessories.

Millennials And Debt

One area in which millennials are struggling? Debt. Millennials, thanks largely to the soaring cost of a college education and an overreliance on credit cards, are burdened with more debt than Gen Xers and baby boomers were at the same age.

Just how much does debt weigh on millennials? Here are some statistics:

  • As of 2019, millennials in the United States had racked up more than $1 trillion of debt, according to research from Federal Reserve Bank of New York.
  • Federal Reserve Bank of New York also reported that the amount of debt carried by millennials has increased by more than 22% in the last 5 years, more than any other generation has ever faced.
  • This debt might be keeping many millennials from buying a home. According to Federal Reserve Bank of New York, the homeownership rate for young adults from the ages of 24 to 32 fell by about nine percentage points from 2005 through 2014. In January of 2019, Federal Reserve Bank of New York released a report estimating that 20% of this dip can be blamed on student loan debt.
  •  Credit card debt, too, is having a negative impact on millennials. According to Northwestern Mutual's 2018 Planning & Progress Study, millennials from the ages of 25 to 34 are burdened with an average of $42,000 in debt.
  • According to the same study, credit card debt made up a fourth of the average amount of debt owed by older millennials. Student loan debt accounted for about 16% of what older millennials owed, according to the Northwestern Mutual report.
  • Millennials have more debt than do other generations. According to Northwestern Mutual's findings, the average U.S. adult has about $38,000 in debt. That's a lot, but it's less than what the average millennial owes.

How Do Millennials Make Purchase Decisions?

 There are a lot of millennials, and these young adults spend a significant amount of money. But what influences their shopping decisions? What inspires millennials to dip into their bank accounts?

Here’s what the research says:

They Like Smartphones

According to a 2019 report from marketing firm Adglow, smartphones and other mobile devices play a big role in millennials’ purchase decisions.


  • 25% of millennials spend more than 5 hours on their smartphones every day. Not surprisingly, millennials make up 58% of mobile shoppers. They are also two-and-a-half times more likely to be influenced by a mobile app.
  • Adglow also reported that 47% of millennials say that their purchase decisions are influenced by social media.
  • The same report said that 16% of millennial smartphone owners make online purchases with their devices multiple times every week.
  • 43% of millennials have liked more than 43 brands on Facebook, Adglow says, while 63% use social media to stay up to date on brands.
  • Perhaps most importantly for retailers, Adglow found that 44% of millennials say they are willing to promote brands on their social networks.

They're Into Saving Money

In 2018, marketing firm Herosmyth published an in-depth look at what millennials look for when making purchasing decisions. A big factor? They want to save money. 

  • Herosmyth said that 66% of millennials say they would switch brands if they were offered a discount of at least 30%.
  • The company said that 72% of millennials search for a discount before purchasing items online.
  • 52% of millennials search for a discount before making purchases in brick-and-mortar stores.
  • When shopping online, millennials spend an average of 3 minutes searching for discounts before they pull the trigger on purchases.
  • Herosmyth said that millennials want the companies from which they buy to do good, too. The company wrote that 75% of millennials consider it fairly or very important that brands give back to society instead of just earning profits.
  • Millennials don't mind shopping at thrift or resale stores for clothing. Herosmyth wrote that 30% of millennials say they shop at such secondhand stores at least once a year. Another 21% said they will continue to shop at such stores in the future.
  • However, this doesn't mean that millennials won't spend big on certain items. Herosmyth wrote that 60% of millennials spend more than four dollars on a cup of coffee and that 70% will spend more to eat at “hipper” restaurants. The company reported that more than 50% of millennials spend money on taxi and Uber rides, while only 29% of Gen Xers and 15% of baby boomers do the same.

Where Are Millennials Spending Money?

It’s not surprising that retailers are constantly courting millennials. This is a big generation, after all, and they have money to spend. But where are millennials spending their money?

It might surprise you, but millennials aren’t averse to shopping at physical stores. Yes, they like to shop online, but they also shop at brick-and-mortar retailers.

Here are some key facts about where all those millennial dollars are going:

  • They shop at retailers who make them feel special. Financial services firm Accenture reported that 95% of millennials say they want brands to court them. They especially like it when brands send them coupons through email or snail mail. This, they told Accenture, has the greatest influence on where they shop.
  • They like shopping in physical stores. According to Accenture, 82% of millennials prefer buying in brick-and-mortar stores. Accenture says that 91% of millennials prefer shopping in drugstores, while 68% prefer shopping in consumer electronics stores. Accenture says that 84% of millennials prefer shopping in department stores, while 83% favor discount and mass merchant retailers.
  • They buy from retailers who offer the best products. Marketing blog Invesp said that eight out of 10 millennials never buy a product without first reading a review of it.
  • They don't want to chat so much with salespeople. Invesp said that 53% of millennials prefer to research the details of products online instead of talking to employees at a physical store.
  • They prefer retailers who will text them or participate in online chats. Invesp found that 61% of millennials said that they find it easier to chat online with retailers or communicate with them through text or messaging apps instead of visiting a physical location to talk with in-store employees.
  • They like shopping with retailers who offer online coupons. Invesp found that 12% of millennials always use coupons when shopping online. An additional 21% said they use coupons very often, while 19% said they use them often. 32% of millennials said they sometimes use coupons while shopping online, while only 16% said they never use them.

Online Shopping Habits

Ecommerce and online shopping continue to disrupt the retail world, and millennials, not surprisingly, are at the center of this.

But how much do you really know about the online shopping habits of these young adults?

  • They make more purchases online than they do in physical stores. A 2019 study by CouponFollow, a provider of online coupons, found that millennials in 2019 make 60% of their purchases online. That's a hefty jump from 2017, when millennials made 47% of their purchases online. CouponFollow also reported that millennials make 40% of their purchases in physical stores. That is down from 53% in 2017.
  • Mobile devices play an important role in millennials' online shopping habits. CouponFollow reported in 2019 that millennials make 36% of their total purchases using mobile devices. Again, that is up significantly from 2017 when millennials only made 24% of their purchases with their phones.
  • Millennials aren't as likely to use desktop or laptop computers to shop online. Nielsen found that only 49% of millennials report using a desktop or laptop for such purchases. That compares to 56% of Gen Xers and 72% of baby boomers.
  • They are still influenced by family and friends. Sure, millennials like to shop online, but that doesn't mean they're not interested in the opinions of family members and friends. Nielsen found that 55% of millennials said they seek the advice of family members when making purchases. A total of 54% said they rely on the advice of friends.
  • Millennial women are especially eager for sales. A 2019 survey of millennial women by Thinkover, a digital shopping website, found that 89% watch items to see if they will go on sale before they buy them. 55% of respondents said they continuously check websites for sales. The survey found that 58% monitor their email for sale alerts.

How Do Millennials Compare To Other Generations?

Spending Habits

Millennials exhibit different spending behaviors than do other generations. How different?

  • Epsilon, in its 2019 study entitled Age Matters: A Guide to Cross-Generational Marketing, said that millennials spend about $322 billion annually. That's less than Gen Xers and baby boomers, who spend about $357 billion and about $548 billion a year respectively.
  • Millennials also tend to spend less with each transaction. Epsilon reported that millennials average 330 transactions a year, with each transaction averaging $54.91. Gen Xers average 306 transactions a year, each averaging $60.36. Baby boomers average 269 transactions annually, each averaging $61.69.
  • What do millennials tend to spend money on? Epsilon found that they spend an average of $1,849 a year on home improvement projects, the top spending category for this generation. Baby boomers spend an average of $1,841 on home improvements, while Gen Xers spend an average of $1,853.
  • Baby boomers and Gen Xers, though, spend more at warehouse clubs. Epsilon said that baby boomers spend an average of $2,039 a year at these retailers, while Gen Xers spend an average of $2,145. Millennials only spend an average of $1,895 each year at warehouse clubs.


Pointing to the effects of the Great Recession, Pew Research Center said that millennials have been slower to form their own households than baby boomers and Generation X. 

  • The Center said that 20% of millennials in 2018 who lacked a bachelor's degree were still living with their parents. That number was 10% for millennials with a bachelor's degree or higher.
  • In 2001, 12% of Gen Xers without a college degree lived with their parents, and just 7% of them with a bachelor's degree did the same. In 1989, 10% of the late boomer generation without bachelor's degrees lived with their parents. Again, just 7% of those with bachelor's degrees did the same.
  • Pew Research Center found that millennials tend to move less than earlier generations of young adults. According to the Center, 16% of millennials from the ages of 25 to 37 have moved in the past year. For previous generations at the same age, only about 25% had done the same.

Eating Out

Millennials spend about the same on food and beverages as older generations did at the same age, according to a report from real estate brokerage CBRE entitled Food in Demand: Consumers. According to the report, when baby boomers were 25 to 35 years of age in 1989, they spent 14.7% of their income on food. Gen Xers in 2001 spent an average of 13.2% of their incomes on food, and in 2016, millennials spent an average of 13.1% of their salaries on food. 

Retirement Planning

It might seem surprising, but millennials are actually doing a better job at saving for retirement than members of Generation X and baby boomers did at the same age.

  • According to the 19th annual Transamerica Retirement Survey released in April of 2019, millennials start saving for retirement on average at the age of 24. Gen Xers started saving for retirement at the average age of 30, while baby boomers began saving for retirement at the average age of 35.
  • The same survey found that millennials save an average of 10% of their income in 401(k) or other retirement plans, while Gen Xers save an average of 8%. Meanwhile, baby boomers also save an average of 10% of their income in such plans.
  • Transamerica reported that millennials have saved a median of $23,000 for retirement, while members of Generation X have saved a median of $66,000. Baby boomers have saved a median of $152,000 for retirement, according to the survey.

Average Credit Scores Of Millennials

Another area in which millennials are struggling? Their credit.


In 2019, Experian reported that millennials have an average FICO® credit score of just 665. That's not a terrible score, but it is lower than the national average FICO® score of 701. Experian said that members of the Silent Generation, those in their 70s and older, had the highest average FICO® score, 756. Baby boomers came in second with an average score of 732.

Credit scores are important. Lenders use them to determine who qualifies for mortgages, auto loans, student loans and personal loans. They also rely on credit scores when assigning interest rates to borrowers. Those with lower credit scores will typically be stuck with higher interest rates on the money they borrow.

Fortunately, it's not impossible for millennials – or the members of any generation – to boost their credit scores. A good way to start is by checking free credit report from Rocket HQSM, and to then study that report for credit weaknesses and possible errors.


What’s all this mean? This only means that millennials are different from previous generations in how they spend, save and live. Those differences, though, can be surprising. Millennials might often be portrayed as lazy and entitled. But as the numbers show, millennials are just as hard-working, thrifty and focused on the future as were their older peers when they were the same age.

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