Millennials Have Different Spending Priorities

If you had an extra $100 what would you do with it? It’s an interesting question that can reveal a lot about a person’s spending priorities.

A few years ago we conducted a series of studies for JC Penney to understand the ‘cross channel shopper’.  One of the tasks assigned respondents was to spend $100 any way they liked.  We required them to bring in the receipts and the merchandise to share with us what they bought where and why. It was a blast. The women had a great time sharing their bargains and experiences, and we couldn’t believe how much they got for the money. Likewise in some work for Wal-Mart we asked people to recount their greatest ‘bargain’ of the last year. Some think of bargains in terms of full shopping carts, others in terms of deep discounts on big ticket items. It’s the differences that made the exercises interesting.

Over the last few weeks, The Next Great Generation Blog has profiled members through the device of ‘Ten Questions’. Amid questions about products you can’t live without, favorite books and scandalous escapades, the blog asks participants, “ If you unexpectedly received $100 today, what would you spend it on?

As you would expect, the responses vary widely based on employment status and age. Nevertheless, the commonality is the desire to spend it on travel, dining out and social experiences. No one mentions an iPad or more gadgets.

If you unexpectedly received $100 today, what would you spend it on?

Angela Stefano: Rent? Food? My heating bill, so I don’t freeze in cold, snowy Buffalo? Sorry, I’m boring. Or I’d go spend it on a concert ticket (two, if I’m lucky and buy from the box office to avoid Ticketmaster’s stupid fees!). Or a plane ticket to Boston. Depends what bills are stuck to my fridge, what shows I’m debating going to and how badly I miss Boston when you hand me that hundo.

Evan Roberts: I haven’t bought shoes in at least a year, so a pair of black Johnston & Murphy Ainsworths (now on sale).

Caitlin Tremblay: Right now? Well I have a Pinkberry craving and that shit’s expensive. I get the chocolate with Cap’n Crunch on it if you’re delivering. Considering grad school is stressing me out (more than I’ve ever been in my life) I’d probably drag some of my friends to Lion’s Head Tavern and grab some Shock Tops and nachos…because that’s just the kind of gal I am. And their nachos are TO DIE FOR. Not kidding. Book a flight to NYC and take the 1 train to 110th. See you there.

Adam DiStefano: Nothing. I’d put it in my wallet and use it like pocket money (which probably means it would end up being used on food or drink).

Kayla Brown: Right now?  Right this second?  Let’s see… I’m out of conditioner… and my car insurance is due.  I think I’d rather buy a sparkly dress and take a handful of over-worked, over-tired, over-caffeinated friends out for an epic adventure in the City of Dreams.  Afterward, I’d buy them all omelettes with sides of delicious diner toast. This might sound like an oxymoron, but omelettes with buttery diner raisin-toast at ungodly hours of the morning is the closest thing to heaven. I think I’m over-budget.  :o(

Colby Gergen, 21: Seriously? $100? I mean, I could buy a nice pair of jeans, but I already have 2 pairs and they do me just fine. I would probably buy something for my girlfriend, if I had a girlfriend (ladies…). What I’m trying to say is that if I received $100 today, right now at 1:00 am, I would buy more coffee.

Alex Pearlman, 23: Probably booze and cigarettes, which is where most of my money goes. But I might also treat myself and a friend to a fancy dinner, meaning it would be a fancy place, and we would also wear fancy clothes – one of my favorite activities.

Bureau of Labor Statistics Consumer Expenditures data seems to support the qualitative insights from TNGG. In general, with the exception of apparel, young adult households seem to put a greater priority on services (other than health-related) than households in general.

According to the Bureau of Labor Statistics Expenditures Study, the “average” household headed by a person under 30 has these characteristics:

Age: 24.5 years old

Household Income: $40, 356

Renters: 73%

Amount spent on rent: $5,111

Household size: 2.3 (earners 1.4)

Amount spent on food: At home: $2,828 Away from home: $2,204

At least one vehicle: 80%

As an age cohort, these under 30 households have about 64% of the average after tax income for all households, and spend about 73% of what an average household spends.  Categories where they spend proportionately less than average relative to their proportion of after tax income (64%) (i.e., underindex) include:

Cash contributions (34%)

Fees & admission (52%)

Postage and stationery (55%)

Floor coverings (27%)

Cars and trucks (new) (47%)

Health care / health insurance (36%)

Life insurance (34%)

Reading (46%)

Housekeeping supplies (59%)

Categories where they spend more than average relative to after tax income (overindex) include::

Food at home (75%)

Food away from home (84%)

Alcoholic beverages (96%)

Personal services (94%)

Men’s and women’s apparel (91%)

Education (138%)

As marketers think about how to bring products and services to the young adult market, they should try to think of how to cast those products more as ‘life enhancing experiences’ than as  ‘stuff’. Most products have at least some service component, or some opportunity to enhance the experience through additional services.

Note: For a fun way to explore differences in spending patterns or compare your own to average, check out