10 Things Millennials Aren’t Spending Money On
The youngest generations are known for being instrumental in transforming the trends of the day. Everything from fashion to technology can hinge on the approval of young consumers, so businesses take them quite seriously. According to Time Magazine, millennials will have more buying power than any other generation by 2017. Thus, their choices about how to spend their money already have a tremendous impact on products, prices, policies, and business strategies. These consumers were raised in an era of extreme student loan debt and economic recession, so in some respects, many of them have learned to be more conservative with their money. It’s interesting to examine what millennials are actually willing to shell out the big bucks for, but it’s the products and services they won’t buy that can be the most revealing — and the most influential.
Here are 10 things millennials aren’t spending their money on.
1. Paid TV
For the average American, 71% of media consumption is still happening via TV sets, but for people age 14 to 24, that figure drops to 46%. These young millennials spend more of their entertainment time on laptops, smartphones, tablets, and gaming systems. ComScore reported 24% of millennials don’t subscribe to paid TV, and some are giving up TV altogether. According to a Nielsen study, adults under age 35 make up almost half of zero-TV households.
Home phones are one of the many technologies most millennials are just not interested in. A study conducted by the Centers for Disease Control and Prevention found two-thirds of millennials live in a wireless-only house. This is a higher portion compared to the U.S. adult population overall, with approximately 41% of households nationwide lacking a home phone. The survey also found a correlation between renting and going landline-free. For those who live in remote areas, a landline phone is a necessity, but when given the choice, young people just don’t see the value.
In a 2013 survey from the Boston Consulting Group, millennials expected to decrease their spending on luxury goods, handbags, and restaurant spending, as well as soda and mobile apps. Among the products respondents said they would spend more money in the subsequent 12 months were fruits and vegetables, organic food, natural products, environmentally-friendly cleaning items, and fresh meat. It would seem this young generation is prioritizing health and sustainability over indulgences and status symbols.
4. Mass-market beer
Cheap mass-market brews like Miller and Coors are falling out of favor with young consumers, who increasingly prefer craft beer. According to one study, 43% of millennials say craft beer tastes better than mainstream beers, while only 32% of baby boomers agree. About 50% of millennials have tried craft brews, versus 35% of the overall population. Millennials likely also see the value in supporting their local economies.
Millennials say they want to own homes, but they just don’t have the money. Harvard’s Joint Center for Housing Studies found that the home ownership rate among adults under age 35 fell by 12% between 2006 and 2011, with 2 million more living with their parents. In many metropolitan areas, millennials simply can’t afford the cost of a mortgage or a down payment. As more unemployed people find jobs, they are moving out of Mom and Dad’s house and choosing to rent despite the unfavorable market.
Americans are getting married later and later in life. Pew Research found 65% of the Silent Generation married between age 18 and 32. For boomers, 48% were married in that age range, compared to 35% in Gen X. Millennials? Just 26%. Many of them told Pew they still want to get married, but they are waiting until they are financially stable. Many of these millennials are simply postponing marriage, but the the amount of money spent on weddings may never return to traditional figures.
Among adults under age 30, only 26% said they invested in stocks, according to a Bankrate survey. Over half of respondents said their primary reason for opting out was a lack of money. Millennials also distrust Wall Street and financial advisers, which is far from surprising since they were hit hard by the financial crisis. Other common reasons this generation resists investing are a lack of knowledge about the stock market and the desire to use their money conservatively.
The number of young people with a driver’s license has fallen significantly, and again, affordability is an issue for millennials. According to the Atlantic, adults age 21 to 34 bought just 27% of all new vehicles sold in America in 2010, down from the peak of 38% in 1985. However, J.D. Power & Associates claims these consumers are buying more today than they were in 2010, which suggests new car sales could be on an upswing for this demographic.
9. Health insurance
According to the Kaiser Family Foundation, adults ages 18 to 34 made up 40% of the uninsured population before the Affordable Care Act came into practice. Young people tend to be healthier, so they may prefer to go without insurance to cut costs. Before the government’s insurance exchanges opened up, many were uninsured because they lacked employed-sponsored coverage. Today, more millennials are slowly buying insurance plans. A lot of the initial enrollees were 18- to 34-year-olds, but not as many as the Congressional Budget Office hoped for in order to subsidize older Americans’ plans.
Since millennials are putting off marriage and home-buying, it’s not surprising that they are also delaying starting families. Women having children in their late teens and 20s recently hit record lows. At the same time, birth rates have increased among 30- to 40-year-olds. Just 42% of millennials said they planned to have children in a 2012 study, a figure that has fallen from 78% 20 years ago. Some millennials don’t want to have children at all, but others are simply wary of serious financial commitments and want to ensure they are prepared.