Surprising Ways Younger Americans Spend Their Money Now

The news often is focused on millennial spending and consumer trends, but millennials represent the largest and poorest generation, with only 2.9% of the country’s wealth. The millennials’ standard of living is far below that of their baby boomer parents; however, this generation is tackling lower wages and considerable student loan debt. This lack of financial stability and security is delaying a lot of key steps when entering adulthood. Millennials, for example, continue to put off big purchases, such as homes, because of affordability. Considering their lack of funds, it begs the question: What are these younger Americans spending their money on?

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To find out how younger Americans are spending their cash, GOBankingRates analyzed data from the Bureau of Labor Statistics’ 2018 Consumer Expenditure Survey. This study compares recent spending by Americans who are 25 years old or younger. It used this same demographic in 2005 to see how spending has changed over time. The 2005 costs were adjusted for inflation, and the difference and percentage change was calculated from 2005 to 2018.

The total annual expenditures for Americans 25 and younger decreased by 11% during this time. This study looked specifically at those expenditures with a percentage change of at least 20 points more dramatic than this overall increase, which then were identified as the most surprising. These expenses were ranked from the highest difference in spending to the lowest.

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Interestingly, younger Americans are spending significantly more money on medical supplies and services, health insurance and education. While this might not come as a complete surprise, they also are spending more on dwellings and lodging, which could show the importance young people put on travel. Mortgages, used cars, and trucks and apparel purchases seem to be less of a concern for those 25 and younger; however, this simply could mean they are unable to afford these particular items. Check out the spending habits of younger Americans and see if older Americans are forking out money for the same items.

Last updated: June 7, 2021

• Spending in 2005: $151
• Spending in 2005 (adjusted for inflation): $196.27
• Spending in 2018: $368
• Difference: $171.73
• Percentage difference: 88%

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Editor’s note: Other household expenses include things such as housekeeping services, gardening and lawn services, laundry and dry cleaning and termite and pest control. This category also focuses on home security systems, moving, storage, household appliance and furniture repair and computer systems and repair.

• Spending in 2005: $191
• Spending in 2005 (adjusted for inflation): $248.26
• Spending in 2018: $460
• Difference: $211.74
• Percentage difference: 85%

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• Spending in 2005: $184
• Spending in 2005 (adjusted for inflation): $239.16
• Spending in 2018: $384
• Difference: $144.84
• Percentage difference: 61%

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• Spending in 2005: $87
• Spending in 2005 (adjusted for inflation): $113.08
• Spending in 2018: $175
• Difference: $61.92
• Percentage difference: 55%

• Spending in 2005: $31
• Spending in 2005 (adjusted for inflation): $40.29
• Spending in 2018: $61
• Difference: $20.71
• Percentage difference: 51%

• Spending in 2005: $21
• Spending in 2005 (adjusted for inflation): $27.30
• Spending in 2018: $41
• Difference: $13.70
• Percentage difference: 50%

• Spending in 2005: $377
• Spending in 2005 (adjusted for inflation): $490.02
• Spending in 2018: $700
• Difference: $209.98
• Percentage difference: 43%

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• Spending in 2005: $140
• Spending in 2005 (adjusted for inflation): $181.97
• Spending in 2018: $242
• Difference: $60.03
• Percentage difference: 33%

• Spending in 2005: $1,359
• Spending in 2005 (adjusted for inflation): $1,766.39
• Spending in 2018: $2,270
• Difference: $503.61
• Percentage difference: 29%

• Spending in 2005: $249
• Spending in 2005 (adjusted for inflation): $323.64
• Spending in 2018: $412
• Difference: $88.36
• Percentage difference: 27%

Editor’s note: Fees and admissions include purchases for sporting events, movies, concerts and plays. However, this also can relate to health and wellness fees such as gym memberships, country club memberships and recreational activities. Younger Americans seem to be spending more on activities they enjoy.

• Spending in 2005: $110
• Spending in 2005 (adjusted for inflation): $142.98
• Spending in 2018: $180
• Difference: $37.02
• Percentage difference: 26%

• Spending in 2005: $95
• Spending in 2005 (adjusted for inflation): $123.48
• Spending in 2018: $154
• Difference: $30.52
• Percentage difference: 25%

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• Spending in 2005: $13
• Spending in 2005 (adjusted for inflation): $16.90
• Spending in 2018: $21
• Difference: $4.10
• Percentage difference: 24%

Editor’s note: Food prepared by consumer unit entails any type of food purchase that isn’t prepared at home or bought from a grocery store. Young people could be spending more on fast food, restaurants and eating out due to a lack of technical cooking skills.

• Spending in 2005: $197
• Spending in 2005 (adjusted for inflation): $256.06
• Spending in 2018: $314
• Difference: $57.94
• Percentage difference: 23%

• Spending in 2005: $90
• Spending in 2005 (adjusted for inflation): $116.98
• Spending in 2018: $143
• Difference: $26.02
• Percentage difference: 22%

• Spending in 2005: $4,085
• Spending in 2005 (adjusted for inflation): $5,309.58
• Spending in 2018: $6,421
• Difference: $1,111.42
• Percentage difference: 21%

Editor’s note: Rented dwellings included any type of residence where rent is paid. This rent includes maintenance fees and parking, among other things.

• Spending in 2005: $83
• Spending in 2005 (adjusted for inflation): $107.88
• Spending in 2018: $125
• Difference: $17.12
• Percentage difference: 16%

• Spending in 2005: $190
• Spending in 2005 (adjusted for inflation): $246.96
• Spending in 2018: $279
• Difference: $32.04
• Percentage difference: 13%

• Spending in 2005: $381
• Spending in 2005 (adjusted for inflation): $495.21
• Spending in 2018: $553
• Difference: $57.79
• Percentage difference: 12%

• Spending in 2005: $90
• Spending in 2005 (adjusted for inflation): $116.98
• Spending in 2018: $79
• Difference: -$37.98
• Percentage difference: -32%

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• Spending in 2005: $69
• Spending in 2005 (adjusted for inflation): $89.68
• Spending in 2018: $60
• Difference: -$29.68
• Percentage difference: -33%

• Spending in 2005: $59
• Spending in 2005 (adjusted for inflation): $76.69
• Spending in 2018: $51
• Difference: -$25.69
• Percentage difference: -33%

• Spending in 2005: $1,907
• Spending in 2005 (adjusted for inflation): $2,478.67
• Spending in 2018: $1,519
• Difference: -$959.67
• Percentage difference: -39%

• Spending in 2005: $297
• Spending in 2005 (adjusted for inflation): $386.03
• Spending in 2018: $235
• Difference: -$151.03
• Percentage difference: -39%

• Spending in 2005: $149
• Spending in 2005 (adjusted for inflation): $193.67
• Spending in 2018: $112
• Difference: -$81.67
• Percentage difference: -42%

• Spending in 2005: $308
• Spending in 2005 (adjusted for inflation): $400.33
• Spending in 2018: $228
• Difference: -$172.33
• Percentage difference: -43%

• Spending in 2005: $631
• Spending in 2005 (adjusted for inflation): $820.16
• Spending in 2018: $460
• Difference: -$360.16
• Percentage difference: -44%

• Spending in 2005: $1,577
• Spending in 2005 (adjusted for inflation): $2,049.74
• Spending in 2018: $1,128
• Difference: -$921.74
• Percentage difference: -45%

Editor’s note: Apparel and services is an umbrella category that includes the purchase of all clothing for every member of the household, including footwear. Apparel services could include alterations, repair, dry cleaning, clothing rental and jewelry maintenance.

• Spending in 2005: $49
• Spending in 2005 (adjusted for inflation): $63.69
• Spending in 2018: $35
• Difference: -$28.69
• Percentage difference: -45%

• Spending in 2005: $191
• Spending in 2005 (adjusted for inflation): $248.26
• Spending in 2018: $135
• Difference: -$113.26
• Percentage difference: -46%

• Spending in 2005: $199
• Spending in 2005 (adjusted for inflation): $258.66
• Spending in 2018: $139
• Difference: -$119.66
• Percentage difference: -46%

• Spending in 2005: $401
• Spending in 2005 (adjusted for inflation): $521.21
• Spending in 2018: $271
• Difference: -$250.21
• Percentage difference: -48%

• Spending in 2005: $720
• Spending in 2005 (adjusted for inflation): $935.84
• Spending in 2018: $465
• Difference: -$470.84
• Percentage difference: -50%

• Spending in 2005: $835
• Spending in 2005 (adjusted for inflation): $1,085.31
• Spending in 2018: $508
• Difference: -$577.31
• Percentage difference: -53%

• Spending in 2005: $17
• Spending in 2005 (adjusted for inflation): $22.10
• Spending in 2018: $9
• Difference: -$13.10
• Percentage difference: -59%

• Spending in 2005: $36
• Spending in 2005 (adjusted for inflation): $46.79
• Spending in 2018: $19
• Difference: -$27.79
• Percentage difference: -59%

• Spending in 2005: $237
• Spending in 2005 (adjusted for inflation): $308.05
• Spending in 2018: $122
• Difference: -$186.05
• Percentage difference: -60%

Editor’s note: Personal service purchases include babysitting charges, daycare, nursery school and tuition for preschool. This category also incorporates fees related to adult and elderly care, as well as those with disabilities.

• Spending in 2005: $328
• Spending in 2005 (adjusted for inflation): $426.33
• Spending in 2018: $152
• Difference: -$274.33
• Percentage difference: -64%

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Methodology: GOBankingRates compared recent spending by Americans less than 25 years old to spending by the same demographic in 2005 in order to study how their spending has changed over time. GOBankingRates started by compiling data on itemized average expenditures from the Bureau of Labor Statistics’ most recently released Consumer Expenditure Survey (2018). In order to compare CES data across years, GOBankingRates used the BLS’ Consumer Price Index Inflation Calculator to convert the average annual expenditures figure for Americans under 25 in 2005 to its equivalent value in 2018. Then, by dividing this output by the original 2005 figure, GOBankingRates was able to calculate an inflation index value. Multiplying each expense from the 2005 CES for the under 25 age group by this value adjusted them for inflation. GOBankingRates then calculated the difference in spending for each expense between 2005 and 2018 in 2018 inflation-adjusted dollars, as well as the percentage change over this period. After finding that the total average annual expenditures for Americans less than 25 years old decreased by 11% between 2005 and 2018, GOBankingRates looked at all expenses for which the percentage change in this period was at least 20 percentage points more dramatic than the overall decrease and identified those that were most surprising. All data was compiled on and up to date as of Feb. 19, 2020.