US millennials spend more money on "experiences" than their parents

By

Benjamin Fitzgerald

Published
Sep 15, 2016

Unlike the generations before them, millennials are spending a lot more money on "experiences" -- travel, entertainment, and dining.

According to the latest report by JP Morgan, which looked at the expenditure of Millennials -- those born between 1981 and 1997 -- who used Chase debit and credit cards in 2015, the younger generations are spending more of their disposable incomes on travel (6%), entertainment (12%) and dining (16%). 

The three categories, classified as ''experiences'' by JP Morgan, collectively accounted for 34% of the average millennial spend last year. This compares to 28% for non-millennials, said the report.

However, by individual category, retail was the top expenditure category, accounting for 19% of millennial spend in 2015. This compared to 20% retail expenditure for non-millennials. 

The grocery category accounted for 15% of millennial expenditure, followed by transportation/fuel (12%) and home improvement (3%). The 'other' category weighed in at 17%.

JP Morgan highlighted the importance of understanding millennial consumer behaviour.

"Representing 30% of the 18-plus population today, millennials are the largest generation and an increasingly influential demographic with $1.4T in retail spending by 2020," said the firm in a statement.

Furthermore, the compound annual growth rate in retail spending for millennials is predicted to be 15% from 2014 to 2020. Non-millennials will see a 4% increase, said the study.