Millennials are quickly becoming one of the most influential groups in the US economy. They are rapidly aging up, and currently make up 35% of the US workforce. 1 Today, their average income is $55,000, 2 which amounts to $3 trillion in total estimated disposable income. 3 As millennials continue to age up, their spending power is poised to increase by nearly 60% within the next ten years. 3
This generation is also more likely than previous generations to spend on discretionary items. 4 5 In an average month, millennials will spend about $1,085 on items like new clothes, dining out, health & fitness, etc. 4 They’ll also spend more than 35-65 year-olds on their non-essential expenses, and younger millennials, those 18-24 years-old, tend to spend the most. 4
Millennials are also a money-conscious generation. Our research, in partnership with Cassandra, found that 52% of millennials stick to a budget. 4 However, good intentions don’t always yield good results, as many millennials don’t like to hold themselves back when it comes to purchasing items or experiences. 1 in 5 said they often run out of money before their next paycheck. 4
When it comes to actually paying for their expenses, 73% prefer to use their debit or credit card over cash. 4 However, most still carry cash, with half carrying less than $50.
Cash is primarily used for food purchases: fast food, restaurants, and groceries.
Credit cards remain popular: The average millennial has 3 credit cards, compared to 4 cards among adults 35-65. 4 Credit cards are most often used when purchasing clothes or travel, but they’re also frequently used for tech, food, auto, and entertainment purchases.
Digital wallets are on the rise, and half of millennials used a mobile payment app in the last three months. 4 When they use a digital wallet, it’s most often for buying smaller items like coffee and tea.
Online shopping is trending up. Millennials are making more purchases and spending more time shopping online this year than they did last. They are also visiting more websites and using their mobile phones more for shopping.
Shopping remains a big part of millennials’ lives, and nearly two-thirds of them say that shopping online and in-store is fun. 4 When it comes to making a purchase, price, quality, and frequency of use are the three top considerations made. 4 Brand loyalty is also a sticking point for this group: 62% prefer to shop with the brands they know. 4 The majority also prefer to try on their shoes, clothes, etc. before buying them. 4
For advertisers looking to reach this growing economic force, it’s important they understand how this generation thinks about and spends their money. In short, millennials are heavy discretionary spenders who value quality and price. And while they tend to shop online more than in years’ past, they continue to value fun in-store shopping experiences.
As the largest generation in history, 3 millennials’ interests, beliefs, and shopping habits are set to transform the future of business and advertising. For more information on the economic power of Millennials, see our whitepaper, created in partnership with Fundstrat Research.