Where Does All the Money Go? Here’s What Millennials Spend the Most Money On
Right now, most millennials are entering that period of uncertainty where they must stand on their own two feet. Mom and dad aren’t their sole providers anymore (for the most part). They’re settling into their careers and assuming adult responsibilities they used to be able to pass on to their parents. Alas, the good days are over. Now, it’s time to enter the real world and pony up real money for housing, clothing, and other necessities. Besides some of the most basic costs, where else is their money going? Here are 11 things millennials spend the most money on, according to the Bureau of Labor Statistics Consumer Expenditure Survey.
Average annual cost: $318
Millennials love their smokes. They spend an average of $318 a year on tobacco products and smoking supplies. It’s no surprise millennials spend a lot on smoking, considering the fact that smoking is highest among this age group.
According to research by Ipsos Public Affairs, the highest rates of smoking are among 18- to 34-year-olds (23%), which is slightly higher than the 35- to 54-year-old age group (22%) and those age 55 and older (17%). Hopefully, millennials will get the urge to stop their bad habit. Quitting could help them save money — and their lives. In 2015, Americans spent close to $170 billion in direct medical care for smoking-related illnesses, according to the Centers for Disease Control and Prevention.
Next: Drink up.
Average annual cost: $478
Young people also make room in their monthly budget for alcohol. It is estimated that millennials spend $478 per year on alcoholic drinks. Unfortunately, those who drink excessively could pay for it dearly in the form of missed work days and health problems.
The cost of excessive alcohol use in the United States was roughly $249 billion in 2010, according to the most recent CDC numbers. The majority of the costs was from reduced workplace productivity (72% of the total cost), health care expenses for treating alcohol-related health issues (11%), law enforcement and other criminal justice expenses (10%), and losses from motor vehicle crashes (5%).
Next: Back to school
Average annual cost: $1,454
Education is of high importance to young people. Although this number seems pretty low, the Bureau of Labor Statistics estimates millennials spend around $1,454 a year on education costs. When it comes to total outstanding private student loan debt, borrowers are collectively $1.4 trillion in the hole. That amount is $620 billion more than the total U.S. credit card debt.
Next: Looking smooth
Average annual cost: $1,648
Dressing well is also a concern for millennials. They spend about $1,648 a year to make sure they’re looking smooth. Most of that amount is spent on clothing for women and girls ($553 a year) and on footwear ($299 a year). According to research from Slice Intelligence, millennials purchase most of their clothing online (35.2%). This is followed by 34.4% of Gen Xers, 25.1% of baby boomers, and 5.2% of the silent generation.
Next: Entertain me.
Average annual cost: $2,276
The data suggests being entertained seems to be more important to millennials than looking good or indulging in vices. Young people spend an average of $2,276 on entertainment each year. Most of this total includes $492 for fees and admissions; $881 for audio and visual equipment and services; and $563 for pets, toys, hobbies, and playground equipment.
Next: Staying healthy
6. Health care
Average annual cost: $2,388
Health care spending for millennials costs roughly $2,388 annually. Most of this amount is spent on health insurance ($1,682 a year), medical services ($459 a year), and prescription drugs ($170 a year). Unfortunately, studies show some millennials are skipping the doctor’s office altogether, so they can cut down on the high cost of health care. In a survey by health care company Amino, 27% of millennials said they delay visiting a doctor to avoid high costs. Roughly 29% of millennials said they were concerned about whether their insurance would cover basic costs. This was compared to 13.5% of survey respondents over age 35.
Next: Staying safe
7. Personal insurance and pensions
Average annual cost: $5,457
Young people shell out a significant amount of cash to keep up with the annual cost to maintain insurance and pensions. Costs for personal insurance and pensions are roughly $5,457 a year for millennials. The majority of costs are for pensions and Social Security ($5,333 a year) and life and other personal insurance ($123 a year).
Next: Eat up.
Average annual cost: $6,315 per year
Millennials spend $6,315 per year on food. Surprisingly, they spend more money on eating food at home ($3,399 a year) than eating out ($2,915 a year). When most people think of millennials, they automatically envision a group of partiers who aren’t home long enough to eat a decent meal. According to the Bureau of Labor Statistics, that stereotype is wrong. When it comes to eating at home, millennials spend the most money on meat, poultry, fish and eggs ($747 a year) and fruits and vegetables ($645 a year).
Next: Death and taxes
Average annual cost: $7,532
Unfortunately, death and taxes are a guarantee in life. No one can escape them, and that includes working millennials. Taxes are also another high cost for young Americans. Each year, they fork over approximately $7,532 to Uncle Sam. The majority of tax payments go toward federal income taxes ($5,954 a year) and state and local income taxes ($1,543 a year).
Next: Getting around town
Average annual cost: $8,514
The annual transportation cost for millennials is around $8,514 per year. Most of that annual fee goes toward costs associated with a new vehicle purchase ($3,871 a year), gasoline or motor oil ($1,830 a year), maintenance and repairs ($661 a year), and vehicle insurance ($833 a year). For those who opt to travel by public transportation, they spend about $502 a year.
Next: A roof over your head
Average annual cost: $16,404
The largest annual cost for millennials is housing. They spend close to $16,404 a year ($1,367 a month) to keep a roof over their heads. Those who own their home spend an average of $3,582 annually on costs related to home ownership, an average of $2,161 on mortgage interest and charges, and an average of $884 a year on property taxes. Another big expense is $2,979 on average for utilities, fuels, and public services. Renters spend an average of $6,343 a year.
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