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Millennials are Spending Smart According to New Study

[Wednesday, July 22nd, 2015]

Young people may get a bad rap for being irresponsible with cash, but a recent survey shows that they are smarter with their money than they often get credit for.

Segmint, Inc.’s 2015 Summer Consumer Spending Survey showed that Millennials (ages 18-34) were on target to spend more money this summer than any other demographic, and the category they were most likely to spend in was leisure activities.

But that doesn’t mean they are squandering their funds away on unnecessary things or spending unwisely. They are also more likely to pay for things with their checking or savings accounts, using a debit or prepaid card, rather than putting them on a credit card and possibly racking up debt.

When asked about summer spending plans, Millennials were the only age group who said they planned to spend more money on leisure this summer than last. Thirty-two percent of them foresaw an uptick in their leisure spending during the summer months.

Missing out on credit card rewards

Because they are reluctant to take on debt they may have a difficult time paying off, young people are largely choosing to forgo credit card rewards and pay for purchases with cash, checks, debit or prepaid cards. They may also be failing to build a stable credit history. Among those who said they would use a credit card for their summer spending, 30% said they were doing so specifically to build credit and improve their credit score.

In contrast, respondents in the age categories 35-44 and 65+ were most likely to say they use credit cards in order to earn rewards. Twenty-seven percent of the 35-44 set and 21% of the 65-and-older folks feel that credit card rewards are the best motivation for charging purchases.

Rob Heiser, CEO of Segmint, said Millennials don’t deserve their reputation for financial irresponsibility. “Millennials are often wrongly perceived as a group and miscast as carefree when it comes to personal finances,” said Heiser. “However, the data within this study show that’s just not the case.”

Where and how much they’re spending

Most of the leisure spending done by Millennials will go toward food and drink, with 36% of the demographic naming that category as the place where they’ll spend the most. Twenty-six percent of Millennials on the younger end of the spectrum (ages 18 – 24) will take a trip somewhere this summer, but just one. Fourteen percent of the older Millennials (those ages 25 to 34) will travel three or more times this summer.
Those younger folks will spend less than $100 on leisure this summer, while seven percent of them will shell out between $3,000 and $5,000 on fun activities during the warm months.

The 2015 Consumer Spending Survey was conducted online between May 27 and 29 and included responses from 509 people.

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