How Do Millennials Spend?

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Generation Gap is a favorite topic of discussion in most social gatherings. It refers to the differences between the generations which incite conflict and complicate communication, thus creating a "gap." The older generation complains about the lackadaisical attitude of the youngsters; the younger generation detests the strict, curt and stringent behavior of the older ones.

Different age groups have different needs and priorities which determines their behavior. It also influences their spending patterns and habits.

The millennials form the largest demographic group in the world and India is leading in terms of the millennial population. Some consider millennials to be much more intelligent as well as disciplined in financial practices as compared to their previous generations; some others believe in the opposite. Read on to find out how differently do these youngsters spend their money.

Shedding Some Light on Generations

In case you are wondering who are these millennials, let me elaborate. If you were born after 1981, you are a millennial. 'Millennials' are often called 'Gen-Y.' People born between 1965 and 1980 are called 'Generation X.' The generation before that is the 'Baby Boomer' generation; these are the ones born between 1946 and 1964.

The calm and matured folks born in between 1929 and 1945 are the 'Silent Generation.' The 'Greatest Generation' preceded them. These groups are classified and created by the Bureau of Labor Statistics. Kids born after 2000 are recently being referred to as the 'Gen-Z.'

Spending Habits of Millennials

Deloitte India and the Retailers Association of India recently conducted a study to investigate the true financial power of the millennials. The study revealed that with a 47% share in the working age population, millennials are no doubt the chief wage earners in India.

This group has high levels of disposable income; they are tech-savvy and digitally connected. They are basically driving various consumer segments towards rapid growth and development. Let's look into their spending habits.


The dining out trend in India has been sprouting drastically in the recent times, and the changing dietary habit of the millennials has set this trend. 65% of India's population comprises of millennials. These are tech-savvy people, who are heavily exposed to the growing global trends and lifestyles. They are well-read, well-traveled and possess a high spending power.

Their food habits are definitely different from that of the previous generation, and this is what drives the growth index of the restaurant industry in recent times. Innumerable fine-dining restaurants, cafes, pubs, clubs, lounges and international fast food joints have to come up mostly in the Indian metro cities to cater to the changing food habits of the millennials.

The modern generation earns more and has higher spending power. Households are mostly comprised of working couples who find it more convenient to dine out rather than indulge in the time-consuming affair of cooking. Moreover, eating out is also a part of socialization in the modern lifestyle.

However, this group of youngsters is also highly conscious of their indulgences. They are more knowledgeable about the various types of food and their health benefits. They look for good and healthy food. With greater exposure to other cultures through extensive traveling, millennials also like to experiment with different and exotic cuisines.

They prefer eating out and spending much more on good food as compared to the previous generations. Drinking has also become a popular socializing technique in recent times and millennials spend considerably on booze as well. Millennials are foodies and they are boosting the success of the food and beverage industry in India.


Owning a house used to be a dream as well as a status symbol for older Indians. They looked for government jobs that pay well and offers job security. These guys preferred a steady and stable lifestyle and chose to settle down at a place to focus on their families. They didn't believe in wasting money on rent - they strived hard to buy their own house.

However, it is not exactly so for the millennials. The new folks love exploring the world. They are a bunch of experimental people who frequently change jobs and don't mind relocating to other cities or countries in search of jobs. Buying a house doesn't make much sense to these nomadic millennials as they do not wish to be tied down to one geographical location.

Rental accommodations are easily available wherever jobs are. Shared apartments and hostel accommodations are flourishing in all the cities. Millennials prefer to pay rent over investing a lump sum on a property. While the older generations buy the houses, the millennials live in those houses and pay rent.

Clothing and Accessories

In this age of Armani, Gucci and Prada, would you expect the youngsters to wear Dhoti-Kurta and carry a jute bag? The modern generation is filled with brand-conscious people who are willing to spend on looking good. Talk about branded clothes, expensive cosmetics, trendy accessories - they have it all. They need it to maintain a standard of lifestyle.

We can't blame them - that's how modern life is! Generation X, in their young days, was satisfied by the simple joys of life. They had fewer demands, they were easy to please and they led a simplistic lifestyle. Millennials, on the other hand, are more of a materialistic generation. The amount they spend on clothes and accessories is way beyond the necessity.


Millennials are passionate about entertainment. The myriad forms of entertainment that we get to enjoy these days were not a thing of the past. Multiplexes, sports bars, OTT Media, Internet, play stations, jukeboxes, etc. have recently hit the market. The young generation spends time as well as money on these things which certainly don't come cheap.

How Do Millennials Spend?


Airfares have become unbelievably cheap in the last decade and that has given a strong push to the tourism industry. Millennials, by nature, are explorative and experimental. They are daring enough to travel the world, curious to learn about different cultures and willing to spend on such satisfying experiences. In short, millennials love to travel; they spend a lot on travel than the previous generations did.


Millennials are also growing more and more conscientiousness about well-being and social good. They are extremely health-conscious and are ready to pay a premium for good health. 45% of Indian millennials prioritize a healthy life. They are willing to pay premium prices to avail of top-class facilities.

The healthcare industry and medical insurance companies are largely benefiting from this behavioral attribute. Millennials also prefer healthy eating - no wonder Patanjali's products have captured the consumer goods market of late. However, not all healthy products come cheap, and millennials do not think twice before spending money on them.


A recent study by TransUnion revealed that millennials have different credit using habits than Gen-X. The study compared the borrowing habits of millennials in 2015 to that of Gen-X in 2001. They found out that the disparity was not necessarily caused by differences in desires but mostly by the different kind of products available.

While home loans and mortgages were more in vogue for Gen-X, millennials are more interested in auto loans and personal loans. Owning a vehicle has become a necessity these days and people prefer it for the amazing convenience that it offers. The rising traffic problems in the cities prove the fact that millennials tend to buy a vehicle at a much younger an age than the previous generation did.

The financial lending bodies have also started actively advertising for loans and offering loans at moderate terms, which are no doubt targeted at the millennials. Moreover, millennials have exhibited a craze for fancy bikes and cars and seem willing to invest large numbers on their dream vehicles.

Moreover, millennials deal with a tough and expensive lifestyle - especially while in college. College fees are exorbitant these days and most youngsters bear the burden of a huge student loan; many switch jobs quite often and pass through phases of unemployment; they also feel a lot of social and peer pressure to maintain a certain standard of lifestyle.

All these push the millennials to take more and more credit. While the banking industry is thriving on this modern social trend, the younger generation is highly vulnerable to debt.


The previous generations focused on savings. They saved up to 35% of their income. The millennials, on the other hand, save only 10%. They spend 33% of their income on entertainment and eating out, 21.5% on apparel and accessories, 11.5% on gadgets and the rest on essentials.

However, they still manage to stay on top of their personal finances. They are smart and well-informed. They are better decision-makers and money managers. They think practically before investing, and their savings always help them manage their money effectively even during the times of crisis.

The older generation has often criticized the inadequate savings habit of the millennials. However, the millennials deal with a plethora of financial obligations. Most of them go broke while paying for their educational loan - something that Gen-X hardly had to bother about.

Lifestyle has changed and the cost of living is perpetually on the rise. One must spend enough to strike the perfect balance between the two. One cannot blame the millennials for saving less in this expensive world.

To Sum Up

The world is always in a state of flux and we should learn to adapt to changes. The millennials welcome all changes with an open heart.

Thus, it is believed that this generation is all set to redefine India's consumption story by grabbing the limelight in consumer markets, provided that they upskill themselves a little in managing their finances and also learn to plan prudently for their futures.


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