A new government study by the Fed Reserve finally confirmed what we all know to be true—millennials are poor. Although it's often assumed that all our money goes towards collecting participation ribbons (it doesn't), Instagramable brunches (maybe a little), and the latest iPhones (yeah, that one might be true), it turns out we simply don't spend much money because we don't have any. No money, mo problems!
The study, "Are Millennials Different?," was written and commisioned by the Federal Reserve as part of their Finance and Economics Discussion Series. It closely examined the spending habits of us to figure out if what we do with our money is actually all that different from Baby Boomers and other generations. Their conclusion? Basically, we would be spending just as much money as other generations if we had any.
According to the study, everyone born between 1981 and 1997 and most closely associated with the consumption of toasted bread and a certain notorious (and delicious) green fruit, have different spending habits simply because we have less money. The researchers looked at everything from household expenditures, assets, and debt across generations as well as peoples' education, marital status, and family size.
The past few years have seen a wealth of published information and speculation about our spending habits, which are often acknowledged as different from previous postwar generations including Baby Boomers and Generation X.
A much-maligned generation, we've been blamed for killing off companies like Applebee's as well as killing every industry from diamonds to breakfast cereal to "big tuna." And yes, I'm also now thinking about The Office (but only the early seasons).
The assertion in a wealth of printed material that describes the so-called "killing" of industries is that we aren't buying as much as our parents as a choice or a reaction against consumerism. The CEO of Buffalo Wild Wings commenting on their struggling business said that "Millennial consumers are more attracted than their elders to cooking at home, ordering delivery from restaurants and eating quickly, in fast-casual or quick-serve restaurants." Chain restaurants are one of the most commonly cited industries at risk from changes in consumer behavior.
Yet, taking into account factors like "age, income...demographic characteristics," our tastes and consumer preferences are the same as any other generation. In fact, there are certain areas where our spending preferences are higher than previous generations. For example, we prefer to spend more on housing than earlier generations. After all, we love our hardwood floors and it can be pretty expensive to tear that laminate floor that Karen put there.
The study concludes that "millennials do have lower real incomes than members of earlier generations when they were at similar ages, and millennials also appear to have accumulated fewer assets."
However, one bright side of the study was the conclusion that we do have about the same level of debt that Generation X did when they were younger—yeah student debt! As well, the Fed points out that it remains to be seen how this pattern will affect us as we get older.
Events like the Great Recession as well as factors like generally unfavorable job markets and the burden of increasing student loan debt have resulted in a generation with simply less purchasing power. For instance, the average student debt for a graduate in 2017 was $39,000. In fact, there is more American student loan debt than all credit card debt.
So, the next time you are accused of not buying enough canned tuna or orders of Applebee's Chef Bugarelli's Stuffed Rigatoni and Tomato Meat Sauce, you can simply point out that we diamonds and chain restaurants as much as the next person!
The full study can be found online here.