Top millennial spending habits and insights for 2024

When you picture millennials (also called Generation Y), who and what comes to mind?

For many, the idea of millennials is caught up in clichés; they’re perpetually thought of as being young, can’t afford houses because they’re obsessed with avocado toast, spend more money on coffee than retirement, and lots of other clickbait nonsense that’s not based on empirical evidence.

Here’s what the data tells us instead.

They are now considered middle-aged

Millennials are defined as anyone born between 1981 and 1996, although they are often lumped together with Gen Z (1997-2012).

For example, the youngest millennials turned 28 in 2024, while the oldest millennials turned 43.

There are approximately 72.1 million millennials in the U.S.

In 2023, Millennials surpassed baby boomers as the largest living adult generation. This means millennials make up a considerable percentage of current consumers and have immense buying power.

They’ve faced a steep uphill financial battle

In addition to student loan debt, rising housing prices in many urban areas have outpaced wage growth, making it difficult for millennials to enter the housing market; it is estimated that millennials are paying nearly 100% more on average for their homes compared to baby boomers.

Lastly, stagnant income levels have also made high living costs, such as healthcare and childcare, less affordable.

These factors and many more come together to shape millennial buying behavior and spending habits.

According to a recent survey by Experian, almost 60% of millennials would choose to spend money on an experience or event rather than buying something desirable.

Part of this is driven by the culture of the homes that millennials grew up in, where the purchase of material possessions used to show off wealth and status. But many millennials also graduated into the workforce during However, many millennials also graduated into the workforce during the Great Recession, making it more challenging to achieve ownership milestones like buying a home or new vehicle and forever changing their perception of what is and isn’t a must-have.

Takeaway: The millennial preference for experiences has driven industries such as travel, dining, and live events to cater to this group with curated events, immersive environments, and social media-worthy moments. Brands have also had to learn how to cater to this preference, from creative packaging (e.g., unboxing videos) to unique digital experiences.

Example: LootCrate has made a particular name for itself in the unboxing scene, with month-long teases and exclusive items, and there are whole channels dedicated to unboxing, like that of Marques Brownlee (known as MKBHD), who focuses on tech releases.

The most recent ESW report reveals that, despite the current economic climate, 27% of millennials plan to increase their online spending this year. Additionally, 42% of those respondents indicated they are looking for less expensive items than they can find in-store.

Ecommerce websites aren’t just convenient for millennials—as digital natives, they are extremely comfortable navigating these platforms and rely heavily on the reviews and recommendations included therein.

Takeaway: Most big brands these days have an online presence, but managing where and how customers can interact with your brand across social media platforms, company websites, blogs, online marketplaces, and online communities and forums is now more critical than ever.

While we wouldn’t go so far as to say that millennials prefer renting over owning, the economic factors mentioned above have certainly made them more familiar with renting. Plus, renting does come with perks — flexibility, fewer maintenance costs, and lower credit requirements.

While the pandemic shifted this trend somewhat regarding homeownership (52% of households with at least one millennial member now own a home), millennials are still more inclined to rent than previous generations. 

Takeaway: Brands should offer business models that cater to the rental economy. As we’ll see in a moment, this frequently takes the form of subscription services, but quality, convenience, and customer service are key to actually retaining subscription customers.

From Netflix to subscription boxes, millennials are the first generation to fully embrace subscription services — particularly digital subscription services. Subscription services can offer seamless and personalized experiences, while providing cost predictability.

Takeaway: By offering customized, value-added experiences and ensuring convenience, brands can build lasting relationships with millennials, fostering brand loyalty and recurring revenue streams.

Furthermore, by aligning subscription offerings with sustainability and ethical practices in mind, brands can resonate with millennials' values, enhancing their appeal and positioning in the market.

Example: Spotify allows users to stream unlimited music for free. Upgrade to a subscription plan (e.g., Individual, Duo, Family, Student), and you can listen to tunes ad-free all day as you work. Plans like these get customers in the door but add value with their subscription service offerings.

Concerns about climate change and social responsibility drive millennials' commitment to sustainability. They actively seek out eco-friendly and ethically produced products, supporting companies that align with their values. For example, according to a survey conducted among consumers in the United States, 80% of millennial respondents said they consider sustainability a driving factor behind their purchases.

Takeaway: Adopting sustainable practices can enhance a brand's reputation and trustworthiness in the eyes of millennials and inevitably impact its long-term viability.

In 2024, millennials prioritize self-care more than ever, significantly influencing their spending habits. This generation is investing heavily in wellness products and services, spending an average of $115 per month — $20 more than Gen Z — on beauty, fitness, and mental health resources, according to a survey by StyleSeat.

In 2023, nearly 50% more millennials planned to increase their online spending on health and beauty products than other generations. This focus on self-care is driven by a desire to maintain a balanced lifestyle and the need to combat the pressures they face, such as economic uncertainty, job stress, and the challenges of managing work-life balance. By prioritizing self-care, millennials actively seek ways to alleviate these pressures, making it a central aspect of their consumer behavior.

Takeaway: For brands, the millennial focus on self-care presents an opportunity to build meaningful connections by offering products that support their well-being. Emphasizing how your offerings can help manage stress and promote a balanced lifestyle will resonate deeply with this generation.

Millennials are leading the charge in using buy now, pay later (BNPL) services, and it’s easy to see why. With a preference for spending money they already have rather than relying on credit, many millennials are wary of traditional credit cards and the high interest rates that accompany them.

According to the ESW report, 1 in 5 millennials plan to use BNPL in 2024, highlighting a significant shift in millennial consumer behavior driven by the 2010 recession and rising student debt. This financial caution has made BNPL attractive, especially for those with low credit limits or poor credit card experiences. By spreading out payments over time without accruing interest, BNPL services offer millennials the flexibility to budget for larger purchases without the burden of upfront costs.

Takeaway: By providing a payment solution that aligns with millennial spending habits, brands can increase sales and foster long-term customer loyalty. Embracing BNPL can position your business as one that understands and meets the evolving needs of millennial shoppers.

The sheer size of the millennial generation, combined with their substantial collective buying power, presents an unprecedented opportunity for marketers. However, to captivate this discerning and socially conscious generation, brands must go beyond surface-level marketing efforts and invest in authentic, purpose-driven experiences that resonate with millennial values, priorities, and aspirations, forging a meaningful connection that transcends transactions.

Of course, this is easier said than done.

Khoros, an award-winning digital customer engagement platform, can help. Khoros provides marketing and customer service solutions that enterprise businesses can use to identify consumer insights and build customer relationships.

If you’d like to get a first-hand look at our award-winning solutions, schedule a demo today. For more consumer insights, see our Forrester Report: Getting to Know Your Customers.