Youths’ spending patterns are changing. Over the past 10-15 years, young people’s preferences have shifted from spending to saving and new data from Gallup indicates that their spending patterns have changed alongside this shift in mindset.
Gallup’s report reveals that 18-29-year-olds last year reported spending an average of $74 per day on discretionary items (unrelated to major purchases or normal household bills).
That $74 per-day figure represents a substantial 20% drop from the $93 average registered by 18-29-year-olds in 2008.
The daily tracking data finds that other age groups have been able to recover from a post-financial crisis plunge in 2009. The 30-49 bracket spent the most last year at $110 per day (up $2 from 2008), followed by the 50-64 group ($95; flat) and the 65+ population ($78; up $3).
Gallup’s analysts point to a number of potential factors for youths’ inability to sustain their earlier levels of spending, including: lower levels of employment; high student loan debt; declines in marriage and childbearing rates; an increase in focus on necessary items at the expense of discretionary ones; and a greater likelihood of engaging in deal-seeking behavior.
Meanwhile, a survey from Northwestern Mutual claims that for Millennials, “conflict between the instinct to save and urge to spend is elevating anxiety.” The survey’s results indicate that Millennials are more apt than others to be taking steps in support of their long-term financial goals, but are also more prone to excessive spending.
Since other adults also value saving over spending it seems that economic situations are more of a drag on youths’ spending patterns. Indeed, recent research demonstrates that youth have lower median incomes, net worth, average household spending and credit card usage than other age groups.
Economic circumstances and spending cuts have a big impact on brands that target youth, and are worth considering in light of arguments that companies are ignoring more lucrative audiences – such as Gen Xers – in their messaging and advertising.
About the Data: Gallup’s 2016 data is based on daily telephone interviews conducted throughout the year with a random sample of 177,788 US adults (18+), including 23,493 18-29-year-olds.