How Millennial Spending Habits Compare to Other Generations


It’s no secret that millennials spend money very differently than previous generations. And while some of the spending habits may not necessarily lend themselves to future financial security, the financial track record of this generation isn’t all bad.

Read on to find out how millennials’ spending habits compare to other generations, from how much they spend on housing to dining out to buying clothing, even who’s more likely to spring for that fancy coffee (though I think you know the answer to that last one).


This really depends on whether you rent or own. For example, millennials spent nearly $93,000 in rent by the time they turned 30, which is $10,400 more than Generation X and $21,600 more than Baby Boomers, adjusted for inflation.

Regarding home ownership, just 37 percent of millennials between the ages of 25-34 own homes, compared to 45 percent of Baby Boomers at this age. Either way, millennials spent about 35 percent of their annual spending on housing, while Generation X spends 33 percent and Baby Boomers spend 31 percent.

But buying a first home isn’t always happily ever after for millennials. A recent survey found that 68 percent of those millennial homebuyers surveyed had buyers remorse, due to overspending on a down payment, underestimating maintenance costs, or settling for a home that wasn’t exactly what they wanted.

Experts have also noticed a lag in homeownership among the millennial generation – about 8 percentage points lower than Baby Boomers of members of Generation X. This can likely be attributed to rising student loan debt, delays in marriage and having children, even a slower rate of building wealth.

A quick refresher: millennials are roughly defined as those born between 1981-1996, and are the largest living generation. Generation X are those born between 1966-1976, and Baby Boomers are those born between 1945-1964. (Keep in mind that those birth year ranges vary, depending on the source.)

Food and Dining Out

Generally speaking, millennials are bigger spenders than the generations before them, especially when it comes to dining habits, like eating out or buying expensive coffee. For example, 60 percent of millennials will buy a cup of coffee that costs more than $4, compared to only 40 percent of Generation X’ers or 29 percent of Baby Boomers.

Eating at a popular restaurant is another habit of millennials, with 79 percent polled saying they would spend money on doing so, compared to 66 percent in Generation X and 56 percent of Boomers.


Millennials are also more likely than the previous generations to spring for extras, such as taxis, Uber rides, or a new electronic gadget. In fact, 76 percent said they’d spend money on a new gadget, while 69 percent buy clothes they don’t need.

Another survey found that about 75 percent of millennials were competing with their friends in terms of clothing, cars, phones, and other extras, while about half were using credit cards to pay for necessities like food and monthly bills.

Retirement and Financial Planning

But it’s not all bad when it comes to millennial spending habits. For example, more than a third of millennials have a financial plan, compared to 21 percent of Generation X’ers and 18 percent of Baby Boomers.

Millennials are also more likely to create their financial plan with the help of a financial advisor and update it annually. They are also more likely to monitor their financial accounts and are generally more knowledgeable regarding fees. Though millennials, Generation X’ers, and Baby Boomers all earmark about 12 percent of their earnings to saving for retirement.

Millennials’ Take on Spending

Regardless of some of their spending shortfalls, a majority of millennials feel secure in how they spend their money, a Charles Schwab survey found. For example, 81 percent of millennials felt confident in their ability to achieve their financial goals, compared to 65 percent of Generation X and 54 percent of Baby Boomers.

Overall, millennial spending habits seem to reflect the generation’s priorities: convenience, a focus on experience rather than things, and a delayed start when it comes to home ownership and starting a family.

It’s also difficult to observe the spending habits of millennials without considering outside factors such as rising student loan debt, lower salaries, even the gig economy. These factors, as well as millennials’ spending habits, definitely play a role in the financial health – and future – of this infamous generation.