How are Millennials Spending Their Money Compared to Baby Boomers?
Millennials are now America’s largest generation and are often the topic of discussion, criticism, and comparison. One of the age groups they most often get compared to are baby boomers. It’s not uncommon to see both sides criticize the other on a variety of topics. One that comes up frequently is the subject of finance and how younger people spend and save. The Department of Labor took a look at different generations in America to get a picture of how they are actually spending their hard-earned income.
One of the biggest differences that millennials have compared to previous generations, especially baby boomers, is their housing. Unlike the older generations, a large majority of millennials (2 out of 3) rent instead of own. When it comes to the size of the house, millennials generally live in smaller spaces — almost double said they live in a space smaller than 1000 square feet compared to baby boomers. Millennials average around $16,500 for housing costs compared to baby boomers at approximately $18,300.
Millennials are often maligned for mishandling money. In reality, almost 70 percent of Americans say they have less than $1,000 in their bank accounts and many say they have no money. But when it comes to actually budgeting, GenX spend the most amount total with baby boomers coming in second. Millennials, however, spend the largest share of their budget on eating out at over 6 percent. A side-note to go along with that, only 42 percent of millennials say they own a dishwasher. A lot less to wash up when you eat out.
When it comes to millennials and baby boomers, there are clear differences, especially when it comes to housing. Two-thirds of millennials say they rent instead of own, and on the whole they spend less than other generations on their housing costs. However, they do spend more on their discretionary spending, like eating at restaurants.
Andrew is a corporate finance consultant living in Los Angeles, specializing in distressed and bankrupt consulting. He helps clients review business plans and the general market and decide what steps to take next. He has a masters in finance.
Andrew enjoys running and biking in the San Gabriel mountains, cheering for the San Francisco Giants and eating (but trying not to gain weight).