Kevin O’Leary: Millennials Waste Money on These 3 Items

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Discretionary spending — it’s the spending you choose to do with the money that’s not allocated to your fixed expenses, such as your rent, food and electric bill.

However, even though it’s your choice regarding how you spend the extra money in your budget, Kevin O’ Leary of “Shark Tank” has an opinion about it. He says that millennials’ overspending on items like coffee-shop coffee, shoes and jeans is nonsensical and wasteful.

Is there truth to O’Leary’s take that overspending on these items can jeopardize your financial well-being? Maybe, but there’s also another perspective that says you should prioritize your discretionary spending based on what is most useful and desirable to you and minimize spending on things that don’t fall into those categories.

Here are the three items O’Leary thinks millennials are wasting their money on and whether his opinion is worth considering.

Overpriced Coffee

Although personal finance experts have varied opinions as to whether buying $4 (or more) coffee on the regular is a huge waste of money, O’Leary is absolutely not in favor of it.

He is adamant that paying $4 for coffee — when he says you could make it for way less than $1 per cup at home — is “incredibly stupid.”

He told CNBC that he forbids it unless you have paid off your college debt and have savings.

Granted, if you have lots of debt and you haven’t started putting any of your paycheck toward savings, then shelling out $20 or so dollars per week on coffee could be considered a waste.

Make Your Money Work for You

After all, over 52 weeks, you’ll have spent $1,040, which might have been used more wisely elsewhere.


Another item O’Leary says millennials waste money on is shoes. The “Shark Tank” investor told CNBC that no one needs more than four pairs of shoes — flip-flops, workout shoes and two pairs of dress shoes.

Buying more than four pairs of shoes is idiotic, he said, because you’ll never wear them, and they’ll sit there for years.

The number and type of shoes you own should be related to your lifestyle, your shoe preference and also the climate you live in. So limiting yourself to four specific pairs of shoes comes down to blanket advice that won’t apply to everyone’s situation. 

According to an analysis of over 8,000 shoes by RunRepeat, the average MSRP of a pair of shoes in 2021 was $124, while the lowest average MSRP was $94.

Of course, you can expect to find shoes at lower prices, but if you spend $100 on a pair of new shoes every month, that could potentially add up to $1,200 per year, give or take. Again, this might be money more wisely spent elsewhere.


O’Leary’s final millennial money-waster is jeans. He told CNBC that if you have more than three pairs — one black, one white and one original jean, you have too many, which is not needed.

Again, this is a blanket statement and won’t apply to every millennial. It depends on lifestyle and preference.

Make Your Money Work for You

Perhaps you have a job that allows you to wear jeans every day. In that instance, you’ll definitely need more than three pairs of jeans — and probably not white ones. You also might not be a black jeans fan. 

An Economist’s Take

Of course, everyone has a right to their own opinion, including O’Leary, but it’s important to remember it’s only an opinion.

To see a different viewpoint, here’s what Robert R. Johnson, Ph.D., CFA, CAIA, professor of finance at Heider College of Business, Creighton University had to say.

“I think O’Leary is misguided,” said Johnson. “That kind of advice assumes we all value things at the same rate. My advice to people is to spend money on activities that provide you the greatest utility and minimize — or simply don’t spend money on things that don’t provide you much utility.”

Johnson said that an example is that if you are not really into cars and look at cars from a more utilitarian standpoint, you shouldn’t feel the need to buy the most expensive car you can afford.

“Better yet, don’t compare your car to your neighbor’s car — particularly if your neighbor is a car person,” he said. 

To enjoy your life and save money, Johnson advises that you step back and determine what purchases provide you the most pleasure and then prioritize them. 

“For some, the daily latte is very important — it likely isn’t just a coffee purchase but has social elements,” he said. “For others, attending concerts or dining out is most important.”

Make Your Money Work for You

The Solution 

“In terms of discretionary spending, determine what you really value and spend money on what provides you the most happiness (or as economists would say, utility),” said Johnson. “Contrary to what Kevin O’Leary or Suze Orman says, if going to the local coffee shop and buying a cup of coffee provides you a great deal of utility, do it and don’t feel guilty about it because others may think it is wasteful. 

“We are all different and should prioritize our spending to be consistent with our unique makeups. The problem that people get into is that they spend money on everything and don’t prioritize. Prioritize what makes you happy and direct your resources there. Minimize spending on items that don’t really matter to you. And, certainly budget to pay off debts and provide for savings.”

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