According to data released by the Bureau of Labor Statistics, Millennials are more frugal than older generations.
The study shows that Millennials spend the largest share of their income eating out, have the fewest number of vehicles, rent more and spend the least on apparel. Age may help explain much of the gap, according to Rodney Clare, associate professor of history who taught a “Millennials in the U.S.” course last spring.
“Part of it is the fact that they’re roughly 18-30 [years old],” Clare said “They don’t have a lot of disposable income like the Baby Boomers and Gen Xers.”
The more reserved spending habits may also be because of increased debt for the generation.
“The cost of college has gone up four-fold since the late 1970s, but incomes adjusted for inflation have only gone up 2 percent,” Clare said.
According to him, young adults have the added weight of credit card debt, which their parents and grandparents didn’t generally accumulate until later on.
Freshman Julia Weber said she doesn’t spend much time tracking her spending outside of checking her bank account balance on a phone app.
“I spend less here than I would if I was at home,” she said. “The most I spend money on, I think, is going out to dinner. I don’t buy things online and stuff like that. I’ve always tracked my money, but I feel like since going to college, I want to save my money and not spend it as much.”
Senior Shay Thomas also spends most of her money on food. She said she doesn’t mind spending a lot at the grocery store, but tends to be frugal otherwise.
“I usually try and be very good about tracking my money, and I try to regulate how much I go out to eat, how much I spend on coffee, if I need a dress for formal, things like that,” Thomas said. “Basically, I try and not spend money unless I really need something or I really have to. I’m not a really frivolous spender. I won’t go out and just go shopping randomly.”
In Weber’s experience, how frugal someone is with their spending depends on a lot of factors.
“Some people are making their own money, like people that have jobs on campus or jobs at home, but I also see people that — like some of my friends — have their parent’s card, so it’s not an issue [for them] to just do online shopping or go out and buy things,” she said. “You have all different types of people and that depends on who you meet.”
Thomas said that, in her experience, the cliche applies on most college campuses.
“I think that stereotype is more common than not, even on [Elon University’s] campus,” Thomas said. “More often than not, the stereotypical Elon student is not what they’re often made out to be. I think it’s more common that students on this campus are eating ramen and broke.”
Clare said another factor in generational spending differences is a change in priorities. One factor he said might explain the “generation shift” in entertainment spending is the rise of technology that allows music and movies to be downloaded, removing the need to go to a theater or store and pay out of pocket.
“I see Millennials as being straddled with a lot of debt,” he said. “The items other generations bought that were big-ticket items, Millennials aren’t trying to buy them.”
For example, because of ride-sharing programs like Uber and Lyft, Millennials don’t necessarily have to fork over money for a car, according to Clare. Renting rather than buying a house, he said, is another example.
“Partly, it’s not a priority to them, and the other part is they can’t afford it because they’re in debt,” Clare said.
Thomas’ advice to underclassmen is to practice budgeting now.
“Don’t totally be frugal. Don’t be afraid to spend a little bit of money. But also, financial responsibility is something very important to learn,” she said. “It’s very important to learn how to budget, so just start small your freshman year … Start with things that are little, so you can start getting that in your routine. I think it’s very important to find a balance.”