Jean Twenge, a professor of psychology at San Diego State University and the author of "Generation Me" said this reflects a general cultural trend toward individualism and focusing on the self, resulting in a greater emphasis on the extrinsic values of money, status and fame.
Millennials are also gun-shy when it comes to investing in the stock market, Dorsey says, causing them to be more conservative investors, or even to manage their own money. Less money in the market also means they have more cash on hand to spend. The first Financial Independence Survey by The PNC Financial Services Group, released in March, found that only 36% are saving for a house, while only 38% are saving for retirement. It says that most 20-somethings put off thinking about funding retirement until they're approaching 30. Only 13% of 20- and 21-year-olds report saving for retirement, compared with nearly 50% of 28- and 29-year-olds.
Boomers, on the other hand, hard hit by the stock market and with homes that have significantly depreciated in value, are becoming more pragmatic -- though it's also a reflection of age. The older you get, the more practical your shopping habits become, says Elizabeth Harris, senior vice president and strategy director at Leo Burnett USA. Her company forecasts that over the next five years, 64% of millennials will spend more on discretionary items, while that number is only 32% for boomers. She said boomers are more practical and driven about saving for the future, while "millennials are optimistic, engaged and connected, so to them it's more of a journey."
Millennial children are influencing their parents' spending habits in one key area: technology. The two generations spend roughly the same amount of money on electronics. Boomers want to tap the knowledge of their children in this area to appear as young and hip as possible, says Dorsey.
Many millennials also have more money for discretionary purchases because they're being supported by their boomer parents. Twenge says many parents are helping to finance their children's lifestyles, purchasing their clothes and technology. "A lot of 25-year-olds are under the fantasy that money grows on trees. They're not balancing the checkbook," she says.
The members of the generation raised by their boomer parents expect a certain standard of living, says Harris. She points out that among the top five spending categories, only one -- car insurance -- is not discretionary; they're conditioned to not consider these items as "extras." Sands says boomers haven't done their children any favors by funding their upscale lifestyle and failing to teach them successful financial habits. Millennials are much more comfortable going into debt, unlike their boomer parents, Twenge says. And that, she says, could carry some "bad long-term consequences."
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Make no mistake, it will be the Millennials who lead the recovery, but it will be the ones who learned the lessons of the recession and managed their finances responsibly who did it, not the ones who fed their never-ending need to consume by racking up a mountain of debt.
I am 27 and don't agree with this excessive spending. You'll look back in ten years and wonder, "where did all my money go?" Spending money you don't have leads to bills you can't pay. When you start defaulting on loans because you bought a Lexus rather than a Honda that will hurt the banks and the economy. If an entire generation is doing it we will be in big trouble. Those things you have to save for if you just have to have them. I think the SUV purchase bothers me the most because it is going to depreciate in value. At a higher income level you may not have to worry about that, but $46k really. I'm not saying you can't have anything, but you need to be smarter with your purchases. If you are one of those people who is going to upgrade your car in a year or two you are going to take a big hit on that Lexus. I don't think they should be praising anyone for buying a Lexus making $46,000 a year, or using credit cards to purchase toys. It's a similar situation where people where taking loans to invest in the stock market it will not end well for anyone.
This is such old tripe. I have heard this arguement for each generation coming out into the world. Whether the economy is good or bad, young professionals come out and spend their money on looking 'good'/'cool'/'professional'. And then some dumb article either praises or damns the generation for being careless or leading a recovrery. It is a normal stage there is nothing different about this generaion and any other. Please don't somehow try to attribut praise to a normal demographic occurrence. In 10 years that same young man will be working out of debt, buying a home and starting a family. Will we praise him for leading the recovery? I doubt it, it will be the next generation that is buying high end goods and services that will be leading the economu.
I am 25 years old, married, have owned my home for 2+ years, max out my Roth IRA, contribute to my 401K, have an emergency fund and additional savings and have no consumer debt, all while making $40k per year. My wife and I drive 7 and 9 year old, paid off cars. I do not have a smartphone or own an ipad. I do have student loan debt that I am aggressively paying down. There are some of us out there who have observed and learned A LOT from the Great Recession. Hopefully the responsibile ones will be able to lead by example and influence our peers.
Clueless, seriously in debt, and purchasing more gadgets (with short obsolescence horizons) on credit.
Not producing any tangible wealth.
This generation can't save a dime, they will not save us.
lets see $50,000 grand in debt and $46,000 a year, lexus car payment, expensive clothes = filing for bankruptcy sooner rather than later...
boy this generation has really got it together....NOT!!
Yes: I am fond of Amos the Prophet. And I'm neither Jew nor Xtian.
This isn't an 'ignorant stereotype'... It's the truth. While I myself (at 22) know many people who are saving enough and not jumping at every opportunity to spend , I also know those who buy everything new that comes their way.
That being said. I graduated college a year ago - got myself a job, not the BEST job, but one that pays the bills. I pay for living expenses + tv + internet + cell phone. I bought a GMC SUV last October on which I make monthly payments(and insurance). I have student loans out the a**, yet I make those payments every month. I just purchased an iPad 3 a couple months ago. All this AND I save money in the bank and a 401K.
This article's main point (what I got from it) is that we spend more than our parents did at our age and I agree - I most certainly do. I know I'm doing something to boost the economy (like buying a car) the only fault I see is in ourselves, not the article, and it's that our generation as a whole (meaning not everyone but the MAJORITY of us) purely and simply do not save enough money for the future
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