How Millennials Think and Spend Their Money
Despite a general shift to wads healthy eating in the western world, you might be surprised to learn that shares of McDonald’s have not been dropping in value. The main reason for this is that although millennials claim otherwise, they love convenience. Since most of them are still quite cash-strapped, the low price point at the food chain makes it very attractive. Here is what we at http://bitgale.com/ have uncovered about how millennials think and spend when it comes to money.
They Get More Out for Less
One recent study found that although millennials tend to go out than previous generations before them, they spend less. In most cases, millennials only outspend generation X and baby boomers on fast food and coffee. It shows that this is a generation, which is always on the move. When it comes to trips, millennials tend to spend quite a lot on them.
They spent more on these trips that the two previous generations. It might show that they take time to hunt for bargains than other generations.
They Are More Experiential Than Materialistic
While millennials are painted as thrifty, it might also show that they place more value on the experience. For most millennials, going out and having an experience is more important than materialistic possessions.
Whether it is about trying out a new coffee or pizza, they care more about sharing the experience with friends than spending. For them, nothing has to be fancy as long as they can spend some quality time with each other. It could be the reason they go on trips more and spend less per trip.
Buying on Credit Vs. Purchases Made on Credit
Another point of interest is how they make purchases. On average, Americans will spend $4,700 a year on credit and $2,400 in cash. For millennials, they use credit less at just $3,300 and spend more on cash, checks, and debit at about $5,200.
One reason for this is that they are averse to debt. They grew up during the financial recession when their parents’ homes were foreclosed. The result is that about 70% of millennials would prefer to use debit cards rather than accrue any debt.
It is the same attitude that has led to most millennials holding their investments and savings in cash, about 70 of them. In fact, only 37% of millennials were confident that they could manage their credit.
They Spend Under Pressure
Millennials are spending under pressure
Millenials were born at the start of the technology age when handheld devices were starting to become a reality. They grew up in a period when parents were taking less of an active role in their lives, and their peers were having a significant influence on them.
This trend continues up to date. Millenials, most of whom are on social media, will spend according to what they see on social media. It is a generation where everyone wants to seem like he or she has made it in life on social media. The result is that the pressure will force them to spend their earnings on things they do not need.
The pressure to conform is one of the significant reasons millennials spend so much. Most of them will admit that they will make purchases based purely on what they see on social media. However, what they fail to understand is that people only post about the best part of their lives on social media.
They Seek Advice from Parents on Big Purchases
When millennials are about to make significant investments in life, such as buying the first home, they will usually call their parents first. It is especially so when they are investing in anything worth over $25,000. Even if it is not a mom, they are more likely to talk to an older person about it.
This is not entirely their fault; millennials were raised this way, in what was known as helicopter parenting. They had never had to make any independent decisions when they were young since mommy was always there to decide for them.
While they may be impulsive about some decisions, they will mostly rely on their parents for the big decisions. Besides that, they will usually have the recent recession in mind and use that as the basis for any decision they make.
When it comes to dolling out significant sums of cash, they are quite careful. However, they are most likely to spend big money on something just because it makes them feel useful rather than because they will get to own something.
They Would Rather Lease Than Buy
Most millennials would rather rent a car than purchase one. They are just not confident about spending big on vehicles and accruing debt.
Whatever industry you work in, it is essential to keep this in mind. It is especially so if your largest customer base is this group.