Millennials less likely to change spending habits because of economy

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Born to a generation where “having it all” seemed commonplace, today’s millennials are known for a variety of perceptions, such as being labeled “trophy kids” and having “helicopter parents.” I’m hardly a millennial expert, but I do know that adults between the ages of 18 and 24 have a very interesting story to tell.

Generational aspects aside, there is a common issue all age groups are facing – how to handle the challenges that exist in today’s economy.  When it comes to millennials specifically, we wanted know whether they are spending less and what is the depth of the economic impact on young adults’ shopping habits. We went to our friends at Prosper Insights & Analytics to find out.

Their April Consumer Survey revealed that 89.5 percent of young adults feel the economy is affecting their spending plans in some way. But for many, it’s evident that the current state of the economy is not going to stop them from frequenting their favorite restaurant or force them to dig through coupons or even circulars for the best deals.

After evaluating the data, I sought the help of Dianne Kremer, senior analyst at Prosper Insights & Analytics. Here’s what she had to say about the mindset of today’s young adults:

“Despite having a higher unemployment rate, 18- to 24-year-olds are less likely to pull back their spending due to the economy. Being less likely to carry the financial burden of a mortgage or the responsibility of children, coupled with being happier with the current administration in Washington, young adults are significantly more likely to have a ‘live for today’ mentality when it comes to opening their wallets. Though it’s uncertain, these consumers remain more confident in the future health of the U.S. economy.”

 

Chart: How current economy is impacting young adults spending plansDescription: Tags: Author: charts powered by iCharts

Here’s a small breakdown of how millennials compare with the average adult when it comes to how the economy is affecting their spending plans (and complete survey results):

  • Half of millenials polled said they are spending less as a result of the economy, slightly less than the 56 percent of average adults.
  • One-quarter of millenials are spending time finding the best deals online, slightly less than the three out of 10 Americans overall.
  • Two out of 10 say they are spending less on apparel, compared to the 32 percent of other adults. Recent studies confirm that this generation has a high propensity to spend on apparel, and this certainly helps paint that picture.
  • Discount stores aren’t the highest on young adults list of ways to save a buck; 16 percent say they are frequenting discount stores more often, compared to more than one-quarter of average adults.
  • Interestingly, travel is also not suffering too much for this age group; just two in 10 say they will travel less or not at all, compared to almost one-third of all U.S. adults.
  • One-third say the state of the economy is driving them to use coupons more often, but that’s less than the 42 percent of other bargain hunting adults out there.
  • Just 20 percent say they are cutting back on the “little luxuries” these days (manicures, gourmet coffee, high-end cosmetics), less than the one-quarter of average adults.

While different demographics may feel the impact of our slow-growing economy in different ways, it’s clear that young adults value a certain kind of lifestyle. Keeping up with that lifestyle is simply a must for millennials, not a choice – but these shoppers are as savvy as any when it comes to finding the best deals.

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