Have you ever wondered why your best friend has a totally different approach to spending money than you? Or gotten into a serious skirmish with your significant other about your finances?Even though you hail from the same generation, you might have very different approaches to money. In fact, there’s now new research to prove it.
The Boston Consulting Group surveyed 4,000 millennials, ages 16 to 34 and found out that of the 79 million millennials (also known as Gen Y), there are six overarching stereotypes that describe their varied approaches to not just spending, but money in general.
While this research is generally used to tell marketers why you buy, it’s also a valuable tool to help you hone in why you spend on what you do, as well as new ways to save in your budget. Below we’ve broken down the six different millennial categories and their spending habits—which one sounds the most like you?
First, identify your type, then we’ll suggest ways you might be able to curb your spending.
Spending Type #1: Hip-ennials
Hip-ennials are the largest millennial group at 29%. But in this case “hip” doesn’t mean trendy. If you’re a hip millennial, you’re optimistic but cautious, and you seriously believe you can have a positive impact on the world.
What they splurge on: Hip-ennials don’t often over-indulge, but when they do they’re suckers for anything that gives a per cent back to charity—like breast cancer research edition heels or co-op supported organic berries. And often their do-gooding hearts are bigger than their current budgets.
How to save if you’re a hip-ennial: Luckily, splurging on luxury items tends to be anathema to you. But woe to the hip-ennial who discovers the perfect (pricey) purse that also gives back to a cause she cares about. You tend to throw the budget out the window if there is a good excuse to spend.
Remember, just because it does good doesn’t mean it won’t blow your budget. Be sure to set aside a portion of your budget for charitable causes so you don’t break the bank when you get swept up into a cause–even if it is for the greater good, going into debt has much worse long-term effects.
Here’s how to give to charity in a way that helps you, too: Why I Give 10% of My Salary to Charity
Spending Type #2: Millennial mums
At 22%, millennial mums are both the oldest and the most affluent of the groups. They spend lots of time online—and love to offer their own, and read others’, opinions. When it comes to money, they value health, travel and pampering their children.
What they splurge on: Millennial mums spend freely in the name of health, wellness and family. They will pay whatever it takes for the latest juice cleanse, family-friendly cruise or mummy & Me developmental class. They believe you can’t put a price on health, baby’s happiness, or the family’s future.
How to save if you’re a millennial mum: Fortunately, spending on your health or your family is a much better “vice” than, say, splurging on junk food or splashy new cars. However, spending with abandon might actually hurt your family in the long run if you don’t have enough savings for college, braces or home upgrades.
That’s why it’s important for millennial mums to set up a “set-aside” system early. Having automatic deductions put into your emergency fund, retirement savings and your kids’ college accounts will ensure you can support your kids in style today and tomorrow.
Spending Type #3: Anti-Millennials
There are 16% of anti-millennials who are the opposite of most millennial stereotypes. Traditional, hard-working and frugal, their top concerns are their family and their work-related goals.
Why does this earn them the label “anti-millennial”? That’s because a large part of the millennial generation prizes work-life balance, giving back and having new experiences as highly as they do pure achievement. “Antis,” on the other hand, have their eye on the prize: They value comfort and success first and foremost.
What they splurge on: Anti-millennials are busy, busy, busy so they tend to buy anything they can justify in the name of efficiency–think high speed mobile modem or paying for a maid service. Their attitude: “My impact will be too minimal to save the world, so why not save that money for me.”
How to save if you’re an anti-millennial: Rather than saving money, you might want to strategize about how to save yourself. You can actually tend to be a bit too practical and are therefore more susceptible to burn-out. (See: Why Women Are Burning Out at Work Before 30).
In the end, sacrificing your health will cost you more than spending the time and money to treat yourself now and then. It’s important for anti-millennials to put aside part of their budget for little splurges so they remember that life isn’t all work and no play. (Here’s how to splurge right.)
Spending Type #4: Gadget Gurus
Only 13% of millennials are Gadget Gurus—obsessive and adept with the latest and greatest technology. They’re laid-back, but also pride themselves on being in the know: For example, when Facebook acquired Instagram, they took to Twitter in droves to appear “cool.”
On the whole, this group tends to be more male than female. They’re also single, self-confident and affluent.
What they splurge on: Gadget gurus have to be seen with the “latest” cell phone and make constant tech upgrades to computers and electronics. They’re first in line for the newest incarnation of their iPads. These needs can push their budgets to their limits.
How to save if you’re a gadget guru: There’s nothing wrong with being up-to-date with your tech—unless you’re going overboard on your budget. And, you’ll want to avoid the trap of buying the latest gadget just because it’s new, and, instead, focus on those that will really enhance your life.
Enter, LearnVest’s Purchase Appraiser: This free calculator will allow you to weigh any glitzy purchase you’re considering, and tell you, in terms of its price, utility and how often you’ll use it, whether it’s really worth your money.
Spending Type #5: Clean and Green Millennials
10% of Gen Y are “clean and green” millennials who are cause-driven, extremely positive and environmentally minded. Their money tends to go to supporting not just themselves, but everyone around them.
What they splurge on: Clean and green millennials love hemp-based, recycled, eco-friendly products. They buy books and magazines on green living and are always willing to spend more for products that are good for the world.
How to save if you’re a clean and green millennial: While your intentions are always pure, you need to make sure that you don’t go into the red in your quest to be green.
First, create a “charity” section of your budget so you can see exactly how much drop on eco-spending. And be careful to monitor your everyday purchases, too: For example, are you spending way more than you need to on shampoo just because it helps saves the rainforest?
Finally, there are plenty of ways to save the world that don’t involve spending a cent. You can support your beliefs (for free!) by getting out and doing clean-ups, organising awareness campaigns and recycling.
Spending Type #6: Old-School Millennials
Old-school millennials are the last 10% of the Gen Y population. They are much less into technology, are conservative spenders and, unlike the majority of their peers, prefer real-life to online interactions. In other words, this isn’t the set updating their Facebook before they’ve had breakfast.
What they splurge on: Old-school millennials love to invest in experiences as opposed to products. Vacations, comedy nights, dining out and concerts are the big ticket items old-school millennials spend on. They also tend to buy books rather than reading (free) blogs.
How to save if you’re an old-school millennial: Experience-based spending can be harder to track because it doesn’t accumulate in your house like clutter or gadgets. You’ll benefit by signing up for LearnVest’s My Money centre, where you can create a free budget, along with folders for every category you spend on—like concerts, restaurants and vacations. This will help you track exactly how much you spend each month.
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