What do millennials spend their money on?
Is it really all avocados and quinoa? It might come as a surprise to some, but millennials tend to spend most of their money doing things rather than buying things.
According to Statista (opens in a new window), 54% said they spend their disposable income on eating out, while 51% said socialising, and just 35% said clothes and fashion.
Saying that, a 2017 survey (opens in a new window) revealed that 95.1% admit to impulse shopping – however, when they shop they tend to be more conscious of price than Baby Boomers (opens in a new window), who are more loyal to brands. So millennials may shop more, but you could also say that they shop better!
One great example of the thrifty nature of this generation is, surprisingly, baby food. Now that the first wave are starting to have kids, baby food sales are taking a hit – down 30% in the past 5 years apparently! (opens in a new window) It looks like more and more young parents are choosing to make their own baby food from fresh, rather than waste money on pre-packaged food. This could definitely be a new trend for people looking at how to budget in the healthiest way possible!
Spending vs saving
Another thing that may come as a surprise is that 49% of millennials consider themselves ‘savers’, while just 25% consider themselves ‘spenders’, according to Experian (opens in a new window).
But that’s not all – Experian also found that the average millennial has around £8,000 in savings, and three in 10 save either a quarter or half of their disposable income each month!
On the other hand, just over 10% save none of their disposable income each month – which just shows how difficult it is to lump this whole generation together!
The house-buying problem
One millionaire famously said (opens in a new window) that if millennials stopped buying so much avocado on toast, they’d be able to afford a house deposit – but as it turns out, it would take 24,499 avocado toasts and 67 avocado-toastless years (opens in a new window) to save for a deposit in London, so maybe it isn’t that simple!
Today, house prices are an average of 7.6 times the average annual salary (opens in a new window) – compared to just 3.6 in 1997 – and it takes an average of 8 years to save for a deposit (opens in a new window). With a lot of today’s first-time buyers staying in full-time education until their early to mid 20s, they usually can’t start saving seriously until later than previous generations did.
Sky-high house prices are another reason why millennials are thought to be spending more on experiences like travelling (opens in a new window) rather than saving for a deposit – because many have just lost hope of ever being able to afford a house!
Looking to manage your money better?
So if you’re a millennial looking to reduce your spending and start building up savings, where do you start?
We know you won’t want to give up brunch, nights out and holidays completely, so how can you save money without sacrificing all the fun? We’ve got loads of tips for saving money on our B-Tox blog (opens in a new window), but here are some of our highlights:
Ditch your takeaway coffee. Buying a £2.50 coffee every working day for a year could cost you £650, so why not make your own at home or work?
Bills, bills, bills. Did you know you could save up to £300 by switching energy suppliers (opens in a new window)? You could also look into switching internet providers, finding a cheaper phone contract and switching to a cheaper gym.
Don’t ditch holidays altogether – just make them cheaper! Booking at the right time, flying off-peak and trying out package deals can all save you cash on your travels. Check out our blog post for savings tips for holidays.
DIY lunches. Find out how you could save up to £1,288 by taking lunch to work with you (opens in a new window) instead of buying it while you’re out. Tasty!
Go veggie – even part time! Ditching meat just two days a week could save you over £200 a year (opens in a new window), plus you might actually hit your 5-a-day target with all that extra veg.
Take advantage of technology. There’s loads of tech out there that can help you manage your money – including the B app! You could also look at apps like Splitwise (opens in a new window) which help you keep track of money owed between friends or family. It’s perfect for flatmates and couples, as it helps you keep track of who’s paid for what and who owes who!
How B can help struggling millennials
We’ve designed B with people like you in mind. While you’re out and about spending, working and socialising, your B app works away in the background to keep track of your money.
If you're a B account holder, when you open the app, you’ll find that most of your B card purchases have been tagged (opens in a new window) with labels like ‘groceries’, ‘eating out’ and ‘style’, so you can see where your money is going and set budgets (opens in a new window) for your spending. You’ll also get useful insights (opens in a new window) into things like how many purchases you’ve made under £10 – because these sneaky one-offs can really add up!
For the money in your B Instant Savings account, the savings pots feature (opens in a new window) is also super handy for people who are saving for a few different things. These pots let you see the money for your house deposit separate from your holiday or new car savings!
Plus, if you’re thinking about buying a house – even far in the future – the B@Home app (opens in a new window) can help you figure out what you can afford, how much you need to save and how long it might take.
This blog is a bit of fun and not intended to influence your decisions in any way. The content of the blog is reliable at the time of publishing, but we can’t guarantee that it is neither error nor omission free, beyond our knowledge. The links are there for you to explore if you wish, but we don’t have any connection with the third party sites, nor responsibility for them or their content.