Long presumed to have less interest in the non-stop consumption of goods that underpins the American economy, millennials might not be different after all, according to a new study out this month from the Federal Reserve. Their spending habits are a lot like the generations that came before them—they just have less money at this point in their lives, the Fed found. The group (born between 1981 and 1997) has fallen behind because many of them came of age during the financial crisis.
The Fed’s findings are grounded in an analysis of spending, income, debt, net worth, and demographic factors among different generations. And although millennials spend freely on luxury cars and clothing, housing and food (avocado toast wasn’t specifically tracked) are 2 areas where millennials have spent less than previous generations, with the younger cohort paying more for education.
Millennials are at somewhat of a full-stop when it comes to saving for a home, with most swimming in student loan and credit card debt. Consequently, their prospects for buying a home—and having a 20% down payment to do so—are next to impossible, unless parents or grandparents contribute some hard-earned cash to their home buying efforts.
At least now relatives know what to get their millennial family members for Christmas.