Why arenít millennials spending? - Honda-Tech - Honda Forum Discussion

General Discussion and Debate Discuss, Debate, and Converse with other Honda-Tech members in a mature, intelligent manner.
Sponsored by:
Sponsored by:

Why arenít millennials spending?

Old 12-01-2018, 06:05 AM
  #1  
rookn00b
Thread Starter
iTrader: (2)
 
xtrac1's Avatar
 
Join Date: Mar 2004
Posts: 5,639
Default Why arenít millennials spending?



Since millennials first started entering the workforce, their spending habits have been blamed for killing off industries ranging from casual restaurant dining to starter houses. However, a new study by the Federal Reserve suggests it might be less about how they are spending their money and more about not having any to spend.

A study published this month by Christopher Kurz, Geng Li and Daniel J. Vine found millennials are less financially well-off than members of earlier generations when they were the same ages, with "lower earnings, fewer assets and less wealth."

Their finances were compared with Generation X, baby boomers, the silent generation and the greatest generation.

The researchers examined spending, income, debt, net worth and demographic factors among the generations to determine "it primarily is the differences in average age and then differences in average income that explain a large and important portion of the consumption wedge between millennials and other cohorts."

Millennials, which the study defined as those born between 1981 and 1997, with ages ranging from 21 to 37, "paid a price" for coming of age during the Great Recession. They had to face historically weak labor demand and unusually tight credit conditions.

Dealing with those financial obstacles probably created "attitudes toward saving and spending" that might be "more permanent for millennials than for members of generations that were more established in their careers and lives at that time," the study says.

Despite millennials' much maligned, unofficial hipster status, the study indicates they're pretty mainstream.

Their spending on motor vehicles ó which is sensitive to economic expansion and contraction, and accounts for about 20 percent of retail sales ó shows millennial households have similar tastes and preferences to older generations, as does their spending on food and housing.

Their consumption habits are similar to their parents' and grandparents' ó millennials just have less money to spend.

The researchers also examined debt between each generation. While the comparisons were "somewhat mixed," researchers said it "seems fair" to conclude that millennials have levels of debt about the same as Generation X and more debt than baby boomers.

The study also noted newer financial obstacles for millennials. Broad economic trends depict a rise in health care expenditures, as well as a rise in college tuition that has outpaced general inflation that previous generations avoided in their young adulthood.

And the generation's higher rates of racial diversity, higher educational attainment and lower rates of marriage? Those are all consistent "with secular trends in the population and are therefore not the aberrations of a single generation," the study said.

Millennials are still fairly young, so "it remains to be seen whether having reached adulthood during those unfavorable years will have permanent effects on their tastes and preferences," the study says.




https://www.npr.org/2018/11/30/67210...rents-fed-says
xtrac1 is offline  
Old 12-01-2018, 06:20 AM
  #2  
washuuu
 
mistersparco's Avatar
 
Join Date: Jan 2004
Location: usa
Posts: 527
Default Re: Why arenít millennials spending?

Itíll all likely balance out as Millennials will likely inherit wealth from their boomers parents.
mistersparco is offline  
Old 12-01-2018, 06:51 AM
  #3  
CD8
Honda-Tech Member
 
CD8's Avatar
 
Join Date: Oct 2001
Location: valley of sun, az, usa
Posts: 2,666
Default Re: Why arenít millennials spending?

I frequently feel like i spend too much monies stupid researchers lol
CD8 is offline  
Old 12-01-2018, 07:02 AM
  #4  
Honda-Tech Member
 
Join Date: Nov 2018
Posts: 5
Default Re: Why arenít millennials spending?

Originally Posted by mistersparco View Post
Itíll all likely balance out as Millennials will likely inherit wealth from their boomers parents.
Boomers will never die, the sun will absorb the earth and boomers will still be here doing anything possible to hold society back to the 1950s.
moopmoop is online now  
Old 12-01-2018, 07:03 AM
  #5  
GDD's Dr. Phil?
 
oneludesol's Avatar
 
Join Date: Sep 2005
Location: SW Florida / Denver Colorado
Posts: 1,771
Default Re: Why arenít millennials spending?

I think the generation is too broad for a study like this, I guarantee the spending habits of people 21-29 are considerably different than those of people 30-37.
oneludesol is offline  
Old 12-01-2018, 07:19 AM
  #6  
something gnarly
 
5SpdH22's Avatar
 
Join Date: Jan 2008
Location: ᶜᵸᶥᶜᵃᵍᵒ
Posts: 666
Default Re: Why arenít millennials spending?

Originally Posted by moopmoop View Post
Boomers will never die, the sun will absorb the earth and boomers will still be here doing anything possible to hold society back to the 1950s.
5SpdH22 is online now  
Old 12-01-2018, 07:39 AM
  #7  
020
that's no moon
 
020's Avatar
 
Join Date: Jun 2002
Location: Death Star 3
Posts: 1,204
Default Re: Why arenít millennials spending?

Originally Posted by oneludesol View Post
I think the generation is too broad for a study like this, I guarantee the spending habits of people 21-29 are considerably different than those of people 30-37.
yup. I would also devide up people 32-45. That generation had the great recession and the mellenium market implosion which was really bad. They saw their investments stay flat and gain nothing for the first ten years of adult life.
020 is offline  
Old 12-01-2018, 08:09 AM
  #8  
I ask Twitter, not xtrac1
iTrader: (1)
 
rico91stang's Avatar
 
Join Date: Feb 2004
Location: THE Bay Area
Posts: 3,215
Default Re: Why arenít millennials spending?

I think it is because most millenials look at stunting as something cool to look at being done, but not actually doing it themselves. I know I dont spend anywhere near my income level. I save at times 40% of my income. Trying to get to a point where I can retire.
rico91stang is offline  
Old 12-01-2018, 08:24 AM
  #9  
Do you even red wheels?
 
ForceFed Motorsports's Avatar
 
Join Date: Jan 2006
Location: Bellingham, WA
Posts: 6,367
Default Re: Why arenít millennials spending?

I donít know, the prime years to get established in your early 20ís didnít pan out so sweet for many I guess.
ForceFed Motorsports is offline  
Old 12-01-2018, 08:39 AM
  #10  
Tickle-shits
 
Tokyosmash!'s Avatar
 
Join Date: Mar 2007
Location: Clarksville, Tennessee
Posts: 3,890
Default Re: Why arenít millennials spending?

Hard to go out and afford that home loan when you’re too busy getting Starbucks every day and working a dead end retail job with a doctorate in some sort of irrelevant field
Tokyosmash! is offline  
Old 12-01-2018, 09:00 AM
  #11  
Honda-Tech Member
 
1 2 NV's Avatar
 
Join Date: Jan 2002
Location: retired 2/13/10
Posts: 7,150
Default Re: Why arenít millennials spending?

Originally Posted by Tokyosmash! View Post
Hard to go out and afford that home loan when youíre too busy getting Starbucks every day and working a dead end retail job with a doctorate in some sort of irrelevant field
That's kind of how I feel. Getting pushed into the corner to be mediocre and equal just isn't panning out IMO.
1 2 NV is offline  
Old 12-01-2018, 10:17 AM
  #12  
Oracle of GDD
 
Ross's Avatar
 
Join Date: Apr 2001
Location: a lake in VA
Posts: 11,896
Default Re: Why arenít millennials spending?

Originally Posted by ForceFed Motorsports View Post
I don’t know, the prime years to get established in your early 20’s didn’t pan out so sweet for many I guess.
Exactly right. Studies show that if you enter the workforce during a recession, your wages will be depressed for the rest of your life.

Combine that with the massive, rapid contraction in actual full-time employment and you have a generation of people with very few options...multiple jobs, gigs, and no stability.

Since the Baby Boomers were so dumb with their money (and the country's), they have to stay in the workforce much longer than their parents did. That also keeps wages and opportunities for the younger generation limited.

Originally Posted by Tokyosmash! View Post
Hard to go out and afford that home loan when you’re too busy getting Starbucks every day and working a dead end retail job with a doctorate in some sort of irrelevant field
For those of us who don't have rich parents AND a guaranteed stable job with Uncle Sam, it's not easy.

"I didn't grow up rich, doesn't everyone have an air-cooled 911 at 22 years old? **** you Ross"
Ross is online now  
Old 12-01-2018, 10:55 AM
  #13  
020
that's no moon
 
020's Avatar
 
Join Date: Jun 2002
Location: Death Star 3
Posts: 1,204
Default Re: Why arenít millennials spending?

Originally Posted by Tokyosmash! View Post
Hard to go out and afford that home loan when youíre too busy getting Starbucks every day and working a dead end retail job with a doctorate in some sort of irrelevant field
houses are more expensive than ever before. Far fewer decent jobs than in years past. Taxes will keep going to do that government workers and military can continue to suck on uncle sams tit at the expense of everyone else. It's sort of a perfect storm and going to get worse.
020 is offline  
Old 12-01-2018, 10:57 AM
  #14  
Oracle of GDD
 
Ross's Avatar
 
Join Date: Apr 2001
Location: a lake in VA
Posts: 11,896
Default Re: Why arenít millennials spending?

Housing, Healthcare, Education have all increased by literally hundreds of % points since the 1980s.

Since the 1980s, real wages have remained flat or even declined for the working and middle classes.

I wonder what happened in the 1980s?
Ross is online now  
Old 12-01-2018, 11:06 AM
  #15  
GDD's Dr. Phil?
 
oneludesol's Avatar
 
Join Date: Sep 2005
Location: SW Florida / Denver Colorado
Posts: 1,771
Default Re: Why arenít millennials spending?

Originally Posted by 020 View Post

houses are more expensive than ever before. Far fewer decent jobs than in years past. Taxes will keep going to do that government workers and military can continue to suck on uncle sams tit at the expense of everyone else. It's sort of a perfect storm and going to get worse.
I'm not sold 100% on the idea, but I've heard the argument from a couple different sources that while homes are definitely more expensive than they used to be, they are also much larger on average (literally twice the size since 1960), and much nicer, on average. It's not an exact scale, but I think it's worth note that the average family back then, raised their families in a 1300 square foot house which cost $12,000 on a $5,500 annual salary. What do you think?
oneludesol is offline  
Old 12-01-2018, 11:12 AM
  #16  
Honda-Tech Member
 
njn63's Avatar
 
Join Date: Feb 2003
Location: Michigan
Posts: 6,515
Default Re: Why arenít millennials spending?

There is also data that shows millennials saving more than baby boomers:
https://www.businessinsider.com/mill...oomers-2017-10

I dunno, I just live my life and don't worry about what others are doing. I'm barely in the "millennial" classification but I maxed out my 401k/HSA the last couple years with money going into investments beyond that. Live below your means and don't let your lifestyle inflate as you get raises.
njn63 is offline  
Old 12-01-2018, 11:13 AM
  #17  
Tickle-shits
 
Tokyosmash!'s Avatar
 
Join Date: Mar 2007
Location: Clarksville, Tennessee
Posts: 3,890
Default Re: Why arenít millennials spending?

Originally Posted by Ross View Post
For those of us who don't have rich parents AND a guaranteed stable job with Uncle Sam, it's not easy.

"I didn't grow up rich, doesn't everyone have an air-cooled 911 at 22 years old? **** you Ross"
>> Rich parents

My dad worked in HVAC and my mom sold appliances at Montgomery Ward, remember them? Kindly eat ****, Ross. I bought that 911 at 19 BTW, amazing what happens when you work hard for a long time and save money.

As for the guarnteed job for Uncle Sam, we’re hiring everyday, so how is that relevant? Wouldn’t want all the “its your fault I cant succeed’s” to have to do any real work.

Tokyosmash! is offline  
Old 12-01-2018, 11:17 AM
  #18  
020
that's no moon
 
020's Avatar
 
Join Date: Jun 2002
Location: Death Star 3
Posts: 1,204
Default Re: Why arenít millennials spending?

Originally Posted by oneludesol View Post
I'm not sold 100% on the idea, but I've heard the argument from a couple different sources that while homes are definitely more expensive than they used to be, they are also much larger on average (literally twice the size since 1960), and much nicer, on average. It's not an exact scale, but I think it's worth note that the average family back then, raised their families in a 1300 square foot house which cost $12,000 on a $5,500 annual salary. What do you think?
that's part of it, absolutely. Interest rates are another part, because you were paying 10%+ a year in interest. However many areas have seen massive increases in housing costs even compared to that. A lot of desirable jobs are in small areas, combined with a much larger population, and the decimation of factory jobs have definitely made it harder to buy a house. And while houses are more luxurious today, that luxury is much cheaper. A refrigerator in the 50s ran you $2-3k in today's dollars. Likewise a tv or washing machine. There are just more people trying to live in areas where jobs are. Then you have lots of areas that refuse to build affordable housing.

So houses are bigger and more luxurious, but that luxury and size is cheaper. I mentioned the luxury being much cheaper, but the size is too. Previously labor was cheap and materials were expensive. That's why you see all this ornate hand-laid scroll work and detail on older houses and buildings. That's inverted now ; labor is more expensive and materials cheaper. We can build a large house quickly and cheaply. Iirc that was one of the innovations of the Sears house....
020 is offline  
Old 12-01-2018, 11:20 AM
  #19  
020
that's no moon
 
020's Avatar
 
Join Date: Jun 2002
Location: Death Star 3
Posts: 1,204
Default Re: Why arenít millennials spending?

Originally Posted by Tokyosmash! View Post


>> Rich parents

My dad worked in HVAC and my mom sold appliances at Montgomery Ward, remember them? Kindly eat ****, Ross. I bought that 911 at 19 BTW, amazing what happens when you work hard for a long time and save money.

As for the guarnteed job for Uncle Sam, weíre hiring everyday, so how is that relevant? Wouldnít want all the ďits your fault I cant succeedísĒ to have to do any real work.

IIRC you have mentioned that your dad is wealthy?

Regarding working, most people who work, work hard. Most people are not looking forca handout. The statistical reality is that the economy and nation has changed. Cutting a cup of Starbucks out is not the difference between getting rich or even buying a house. It's a popular trope, but it's insanely false.
020 is offline  
Old 12-01-2018, 11:27 AM
  #20  
Honda-Tech Member
 
njn63's Avatar
 
Join Date: Feb 2003
Location: Michigan
Posts: 6,515
Default Re: Why arenít millennials spending?

Originally Posted by 020 View Post
Cutting a cup of Starbucks out is not the difference between getting rich or even buying a house. It's a popular trope, but it's insanely false.
It's symbolic of the lazy/stupid choices that some make. On it's own, stopping at Starbucks everyday is not a big deal but that same person is probably making a bunch of other **** financial decisions as well (not bringing lunch to work, driving a new car, buying too expensive of house, driving something with poor fuel economy, etc). Death by a thousand cuts.

I'm not disagreeing that there are systemic issues as well but you have to play the hand you're dealt. There are plenty of people making 6 figures and living paycheck to paycheck due to nothing but lifestyle inflation.
njn63 is offline  
Old 12-01-2018, 11:30 AM
  #21  
Honda-Tech Member
 
tony_2018's Avatar
 
Join Date: Nov 2005
Location: Austin, Tx
Posts: 11,457
Default Re: Why arenít millennials spending?

west coast...
tony_2018 is offline  
Old 12-01-2018, 11:32 AM
  #22  
Honda-Tech Member
 
shipo's Avatar
 
Join Date: Aug 2012
Location: Southern New Hampshire
Posts: 365
Default Re: Why arenít millennials spending?

Hmmm, my son left the Navy last December as an AD2 (Petty Officer Second Class - E5) at 23 years old. He promptly got a good job, bought a new car (Fiesta ST), and then a townhouse in Denver. I guess he is doing his part.
shipo is offline  
Old 12-01-2018, 11:34 AM
  #23  
Tickle-shits
 
Tokyosmash!'s Avatar
 
Join Date: Mar 2007
Location: Clarksville, Tennessee
Posts: 3,890
Default Re: Why arenít millennials spending?

Originally Posted by 020 View Post

IIRC you have mentioned that your dad is wealthy?

Regarding working, most people who work, work hard. Most people are not looking forca handout. The statistical reality is that the economy and nation has changed. Cutting a cup of Starbucks out is not the difference between getting rich or even buying a house. It's a popular trope, but it's insanely false.
Is in the last 10 years or so, yeah. Started doing vintage guitars again and after about 5 years of quitting his decent paying HVAC job, driving a Regal K car, eating ketchup spaghetti and some extremely bold investing he made a pretty decent amount of money. Went from a suitcase of clothes and near bankruptcy when my parents divorced to a millionaire in a decade.

Something, Something narrative something, something.
Tokyosmash! is offline  
Old 12-01-2018, 11:39 AM
  #24  
GDD's Dr. Phil?
 
oneludesol's Avatar
 
Join Date: Sep 2005
Location: SW Florida / Denver Colorado
Posts: 1,771
Default Re: Why arenít millennials spending?

Originally Posted by njn63 View Post
It's symbolic of the lazy/stupid choices that some make. On it's own, stopping at Starbucks everyday is not a big deal but that same person is probably making a bunch of other **** financial decisions as well (not bringing lunch to work, driving a new car, buying too expensive of house, driving something with poor fuel economy, etc). Death by a thousand cuts.
It's a mindset thing. Today, I am wealthy by any measure, 10 years ago, I was broke by that same measure, and I am comfortable with the prospect of one day being there again. That being said, as my spending habits in some things have changed pretty significantly over the years, I still can't bring myself to spend $5.00 on a cup of coffee every day, not out of principle, but because my brain tells me I can't afford it. Same thing goes for eating out, I've been in environments where the norm was $8 a day in fast food, and I've been in environments where the norm is a $50 sit down meal every day. The contents of my home prepped Tupperware lunches have remained constant. Recently, I peeled the covers back on my brother's finances (20 year old). He makes like $2000 a month and literally spends $600 a month between Starbucks, fast food, and restaurants. There's also $50-100 a week in cash withdraws which I'm positive is weed.
oneludesol is offline  
Old 12-01-2018, 11:43 AM
  #25  
GDD's Dr. Phil?
 
oneludesol's Avatar
 
Join Date: Sep 2005
Location: SW Florida / Denver Colorado
Posts: 1,771
Default Re: Why arenít millennials spending?

Originally Posted by 020 View Post

that's part of it, absolutely. Interest rates are another part, because you were paying 10%+ a year in interest. However many areas have seen massive increases in housing costs even compared to that. A lot of desirable jobs are in small areas, combined with a much larger population, and the decimation of factory jobs have definitely made it harder to buy a house. And while houses are more luxurious today, that luxury is much cheaper. A refrigerator in the 50s ran you $2-3k in today's dollars. Likewise a tv or washing machine. There are just more people trying to live in areas where jobs are. Then you have lots of areas that refuse to build affordable housing.

So houses are bigger and more luxurious, but that luxury and size is cheaper. I mentioned the luxury being much cheaper, but the size is too. Previously labor was cheap and materials were expensive. That's why you see all this ornate hand-laid scroll work and detail on older houses and buildings. That's inverted now ; labor is more expensive and materials cheaper. We can build a large house quickly and cheaply. Iirc that was one of the innovations of the Sears house....
So would it be fair advice to give to someone who is comparing their career and housing opportunities to their grandparents, to also live like their grandparents, half the house, half the stuff, further from town, 1 family car, 1 television (if any), etc?
oneludesol is offline  

Thread Tools
Search this Thread

Contact Us Archive Advertising Cookie Policy Privacy Statement Terms of Service

© 2018 MH Sub I, LLC dba Internet Brands

We are a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for us to earn fees by linking to Amazon.com and affiliated sites.