Survey: Millennials’ Non-Essential Spending Outpaces Gen X and Baby Boomers
While the average monthly spend on non-essentials, such as travel, gifts, dining out, etc., for most Americans is $697, the average for millennials tops out at $838 a month, according to a new TD Ameritrade survey.
And all that spending is contributing to credit card debt and reducing retirement saving.
Millennials spend the most ($838) on non-essentials monthly, followed by boomers ($683) and Generation X ($588), according to the online survey of 1,100 American adults with at least $10,000 in investable assets.
Nearly one-third of respondents (32%) said non-essential spending contributed to their credit card debt, with the breakdown being 49% for millennials, 46% for Gen Xers and 23% for boomers.
And nearly half of the survey respondents (48%) said spending on non-essentials affected their retirement savings, with millennials (64%) and Gen Xers (61%) saying the impact was greatest and boomers (42%) saying their retirement savings were the least affected.
Millennials, in particular, felt the most pressure to spend on non-essentials, saying that friends and family (43%), boredom (33%), social media (21%) and advertising (20%) were the major factors contributing to the amount they spent.
Despite the negative impact to their budgets and retirement accounts, nearly one-third (32%) of those surveyed reported their non-essential expenditures served a purpose, such as helping them relax, improving their looks/fitness, and pursuing their hobbies.
But it’s boomers who seem addicted to spending on the little extras. While more than one-fifth (22%) of all respondents said they would not be able to last one month without spending on non-essentials, boomers (25%) lead the way, followed by millennials (22%) and Gen X (22%).
When asked about the items that would be hard to live without, travel and caffeine reigned. Twenty-seven percent of Gen X respondents said they could not live without vacation/travel, followed by millennials (25%) and boomers (20%). And 14% of boomers said they could not live without coffee, followed by Gen X (11%) and millennials (10%).
Getting a grip on non-essential expenses is essential to achieving financial well-being. A budget will help quantify truly necessary expenses and putting the money spent on non-essentials towards credit card debt and retirement savings will pay off in the long run.