In the 1980s and ‘90s, young Gen Xers allocated their money towards mortgages for white-picket fence houses, first cars, and impending retirement savings. In 2018, Millennials prefer to spend their hard-worked cash on $5 oat-milk lattes, clothes and Netflix. So, while this youthful workforce defines themselves as savers, are these expenditures harming their future years?
A recent LendEDU study, conducted with over 1,000 Millennial Americans ages 22 to 37, revealed the correlation between day-to-day spending habits and assigned retirement savings for one month. In it, the survey found, the average Millennial spends $38 on coffee per month, but will save, on average, $480 for retirement. However, 27% of respondents expend more on coffee than on retirement savings.
Additionally, the survey reported 49% of Millennials will spend more on restaurants rather than allocating finances towards their 401(k). The average amount spent per month on dining out? One-hundred and sixty-three dollars, the survey says. And, similar to coffee and dining expenses, Millennials are spending their money on online streaming services and events, such as Netflix, Spotify and concerts.
The study points out the importance of enjoying these social events and small pleasures. Because even though Millennials will spend more on avocado toasts and exercise, past studies report they are prepping for retirement better than previous age groups and are highly-informed health care consumers. And, they continue to manage that average $480 per month on retirement savings.
More information about the study can be found here.