After nearly a year and a half of budgeting and careful spending, young American adults are ready to spend more freely amid loosening pandemic restrictions.
In fact, a new survey from Washington, D.C.-based B2B review company Clutch reveals that 48% of people ages 18 to 34 report an increase in their spending this year — significantly more than respondents ages 35 to 54 (34%) and those 55 and older (30%).
Millennial spending rebounds after a frugal 2020
With millions of Americans seeing their income decimated by the COVID-19 crisis and the resulting recession, it's little surprise that the majority of consumers put their economic impact payments (stimulus checks) toward building their savings or paying down debt.
Similarly, Clutch shows that 61% of Americans cut back on spending in March and April 2020. Millennials, in particular, spent less in the following categories:
- Restaurants (45%)
- Travel (30%)
- Health and beauty (12%)
- Shopping and retail (6%)
The Clutch survey also reveals that although 20% of millennials canceled trips due to the pandemic (versus 23% of Americans), only 40% of millennial respondents stopped making future vacation plans for the rest of the year (versus only 15% of Americans who continued to make plans).
And perhaps to make up for lost income in 2020, 72% of Americans who made resolutions for 2021 renewed their focus on their finances, according to a survey from the Million Dollar Round Table late last year.
However, Clutch finds that millennials have increased their spending in other areas. Specifically, it found that:
- 50% of millennials order takeout one or two days a week (versus 44% of Americans)
- 48% of millennials spend more on food and groceries (versus 47% of Americans)
Millennials, older counterparts spend more money online during the COVID-19 pandemic
Clutch also notes significant upticks in online spending across generations during the pandemic. For instance, 30% of millennials spent more money online in early 2020, possibly in an attempt to relieve some of the stress from the global crisis.
The biggest change in online spending, though, appears to be among the next generation: The report indicates that 50% of people between ages 35 and 54 saw an increase in online spending in 2021, compared to 43% of people between ages 18 and 34 and 37% of people ages 55 and older.
Because of nationwide economic shutdowns that left many consumers unable to shop for necessities in person, many shoppers may have turned to e-commerce channels for their goods and products instead.
Methodology: Clutch surveyed 494 Americans in July and August 2021. Among the age groups ValuePenguin highlighted, here’s how the respondent percentages broke down:
The company also surveyed 351 Americans in May 2020. This included, by age range: