Whether it’s beans on toast or avocado on toast, the net effect is the same: Millions of Americans of all ages are blowing their cash in fancy brunch spots.
Every age group admits to busting their budget, if not their britches, on food and beverages. It’s the No. 1 reason for exceeding expenses for those aged 20 to 29 (40%), 30 to 39 (34%), 40 to 49 (39%), 50 to 59 (36%) and those aged 60 and older (33%). That’s according to a survey of 1,000 people by Brandtrust, a research and strategy firm. Perhaps less surprisingly, the younger cohorts aged 20 to 39 are most likely to overspend on alcohol (roughly 9.5%) than older people.
They weren’t the only similarities between generations. Entertainment (16.4%) and clothes, accessories and beauty products (16%) were a close second and third place for the youngest cohort aged 20 to 29. Children’s expenses were the second most popular reason for breaking a budget for those aged 30 to 39 (20%), 40 to 49 (22%) and 50 to 59 (18%). Entertainment was the second most popular reason for exceeding expenses for the oldest cohort aged 60 and older (33%).
The authors of the report said the spending coincided with the late developmental psychologist Erik Erikson’s stages of psychosocial development. “The younger generation is trying to facilitate mating goals with alcohol, clothing and entertainment,” they said. “The middle generation shifts to childbearing and rearing and begins to focus on meeting their children’s needs.” For those 65 and older, “the virtue is wisdom, and the challenge is to become content with the entirety of one’s life.”
Another reason to not treat millennials like spendthrifts: Nearly half (47%) of working millennials have $15,000 or more in savings and 16% have $100,000 or more in savings, according to Bank of America’s recent “Better Money Habits” report. The bank asked about the total amount of savings, including bank savings/checking accounts, IRA, 401(k) and other retirement or investment accounts. A nine-year bull market has clearly helped. The findings stand in sharp contrast to Americans as a whole, who are saving less money than ever.
Millennials have bigger problems than eating too many brunches over the weekend. They shoulder more student loan debt than any other generation and face house prices that are far higher than their parents did at their age. Student loan debt has reached $1.4 trillion as the cost of college has soared. And spending no more than 30% of their income on rent or a mortgage, a golden rule for decades, is near-impossible for many young Americans.