Aussie spending habits shift as millennials take over

Results are out for the 2021 Census and Millennials now make up 21.5% of the Aussie population, set to overtake the similar proportion of Baby Boomers. Long teased for their penchant for avocado toast and ‘killing’ industries, millennials are now aged 25-39 and how they spend their money is no laughing matter.

Whether you’re a millennial yourself or not, 21.5% is nothing to sniff at. At prime working age, millennials hold tremendous power over the market as both providers and consumers.

How are millennials spending money?

Millennial spending and saving habits are key to understanding shifts in the market, with Macquarie analysts anticipating that by 2030, two of every three dollars earned will be by this subset of the population. 

Growing up with the internet has earned millennials a sense of digital literacy. This has moved far more of their spending online, and at their fingertips with mobile phone apps: 37% less likely to dabble with credit cards than Gen X or Baby Boomers, according to a report for Afterpay by research firm AlphaBeta. Instead, they are the primary audience on BNPL platforms.

Explored in the same study is exactly where that Millennial money is going. Priorities have shifted - they’re spending less money on alcohol than older generations (by 16%) and have obliterated cigarette spend (spending 71% less than older Aussies). New vices look a little different, the millennial love for travel back in full flight post COVID-19. 

Where are they spending more? The everyday necessities - public transport spend is 24% higher and private health insurance is costing millennials 23% more than their elders. Instead of spending on big ticket items like TVs, they’re streaming devotees. They’re also spending based on belief and ethics, according to an Edelman study, with millennials sitting at the top of all groups shopping (and banking!) in line with their morals. 

How are millennials saving money?

A Commonwealth Bank report shows that there’s a big divide in where 25-39 year olds put away their money. While a third regularly added to a savings account, 14% were living paycheck to paycheck. Looking at the sky-high cost of living, this isn’t surprising.

The same study shows millennials aren’t inclined towards a savings plan, despite the idea of buying a house being a goalpost for ‘adult’ achievement - with less than 28% of those surveyed actually having kicked that particular goal.

Those who are saving have shifting goals. While 18% of those surveyed were focused on their long-term savings goals, 20% were thinking short-term - dreaming of holidays and experiences, or just adding to the rainy day fund.

Along with moving away from credit cards and having a strong preference for using their own money, a CommBank study found that property was far and away the top choice for investment. 86% of those surveyed wanted to have more open conversations about investing their money - in property, superannuation, and the stock market.

What does the future look like for millennials?

As the Baby Boomer population continues to decline, millennials are set to continue to take over. Though the world might look a little different, possibilities remain open and the market is constantly changing.

With strong budgets to account for those rainy day spending needs, sensible savings (a plan or otherwise!) and investments, and armed with digital literacy, Millennials are set to continue as a powerful force in the economy.

To find a space for your savings that suits you, explore some of our Mozo Expert’s Choice Award winners for Best Savings Accounts.