6 Things Millennials Overspend On, According to Financial Experts
It’s never a good idea to spend more money than you can afford. But it’s especially problematic right now, with stubbornly high inflation and an uncertain economic outlook.
Even so, many Americans continue to overspend on certain items. This is a problem among all age groups — including millennials.
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Here are six things millennials overspend on, according to financial experts.
Wellness and Self-Care Services
This spending category was cited by Cody Schuiteboer, president and CEO of Best Interest Financial, a Michigan-based provider of mortgage and personal finance services.
Wellness and self-care services cover a range of activities, including meditation classes, mental-health support, nutrition counseling and personal training. The typical millennial spends more than $100 a month on such services – a lot more than older peers, according to Schuiteboer.
“Since it is framed as investing in oneself, it is particularly hard to cut,” he told MoneyLion. “For instance, while a boomer may go for a single annual membership, millennials will spend the same amount per month across multiple services.”
Subscriptions
“Subscription overload” is the single biggest area of excess spending among millennials, according to Schuiteboer.
His firm’s average millennial customer has about eight active subscriptions and spends roughly $120 a month on subscription-based services. That adds up to $1,440 a year.
Schuiteboer listed two main reasons millennials spend so much on subscriptions.
“First, millennials grew up with subscription-based services as a concept and treat them like utilities,” he said. “Second, subscriptions are auto-renewing, and a subscription you don't recall ever subscribing to is effectively a monthly donation.”
Concerts, Sports and Other Events
Nearly three-quarters (73%) of millennials admit to spending money on concerts, sports and other events even when they can’t really afford it, according to a blog from Telhio Credit Union.
“Paying for these types of events is high on their list of priorities, so much so that millennials value the experiences more than possessions,” Telhio noted.
Social Media-Induced Impulse Buys
Millennials are much more likely than older generations to be influenced by social media when deciding whether to make a purchase, Schuiteboer said. Once millennials commit to a social-media induced impulse buy, they also tend to spend a lot more money.
“The reasoning is obvious: Since they carry a mobile store in their pockets that gets them hooked, they can't resist the temptation,” Schuiteboer said. “In contrast, boomers barely perceive social media in that manner at all.”
Meal Kits/Delivery Services
This category was cited by both Telhio Credit Union and Schuiteboer as an example of millennial overspending. The main reason they spend so much on these services is convenience — which is nice, but it doesn’t come cheap.
“The issue here is not with food itself. It's the various surcharges that come with the convenience factor,” Schuiteboer said. “Thus, a $14 meal easily turns into $24 if delivery, service fees, additional charges for the order size, etc., are added to the bill.”
This isn’t just an occasional thing, either. For many millennials, it happens “multiple times a week,” he added.
Lifestyle Inflation
Lifestyle inflation refers to the habit among some millennials to adopt more expensive lifestyles whenever they get a boost in income, rather than maintain the same lifestyle and save the extra money.
“Every time they get a raise, they end up buying a better apartment or upgrading other services,” Schuiteboer said.
One result is that they still have little wiggle room financially even when they earn a lot more money than they used to.
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This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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