The millennial consumer is a topic of heated debate. According to some, their blatant unwillingness to participate in the traditional economy is spelling the demise of businesses and even entire industries. Others would tell you they’re just too poor to contribute in any meaningful way, lacking the opportunities previous generations enjoyed at the same age.

Also, supposedly they spend too much on avocado toast.

But what are millennials actually spending their money on? Are they really so different from the boomers who raised them – and if so, why? This is the first generation to grow up with the internet, so it makes sense that their approach to finance would diverge from the generations before them.

Read ahead for a breakdown of millennial spending habits.

What Millennials Are Spending Their Money On

A 2017 study from TransUnion found that millennials are spending more money on auto loans and personal loans than Gen X did at their age. They took out auto loans 20% more often than previous generations and signed up for personal loans at double the rate.

In the early 2000s, auto loan terms hovered around the five-year mark, but now the average loan is between 73 and 84 months. Some lenders even offer eight-year loans. When loan terms are longer, monthly payments seem more manageable and more affordable for millennials. However, extended loans cost millennials more in interest and keep them indebted longer.

Other data around millennial spending isn’t surprising. More than half of millennials spend money on taxis and Ubers, 76% of them buy new electronic gadgets and more than 70% go to new restaurants, concerts or sports games. They also spend $250 a month on restaurants and take-out.

But it’s not just new cars and Instagram-worthy meals that millennials are spending a lot on – it’s also the necessities. The average millennial spends $334 on groceries and $314 on healthcare premiums every month. In major cities, they spend about half of their salaries on rent.

Let’s not forget student loans. The average student loan payment for those between 20 and 30 is $351 a month. Since the average millennial salary is around $26,000, it’s no surprise that many of them struggle to save. Another report from Goldman Sachs found that salaries for young people have declined significantly since the 2000s.

Are Millennials Saving?

The 2018 Better Money Habits Millennial Report from Bank of America showed that some millennials are doing a good job with their money. Almost half of millennials surveyed said they had $15,000 or more in savings while 16% had $100,000 or more.

But overall, millennials aren’t doing enough. A 2018 report found that 66% of people between 21-32 have nothing saved for retirement. Many are prioritizing debt repayment or saving for a down payment, but waiting to build up a nest egg could be costing them hundreds of thousands of dollars.

A 25 year-old who starts saving $100 a month for retirement today will have $264,112 by 65. If they wait a decade, they’ll only have $122,808 – or less than half that amount. Unless their student loan interest rates are in the double digits, it’s better to pay the minimum on those loans and put away money in their 401k or IRA.

They could also be setting themselves back by not taking advantage of employer contributions to their 401k. This is essentially free money they’re leaving on the table – something this generation can’t afford to do.

What Millennials Aren’t Spending Their Money On

Growing up during the housing bust was a formative experience for millennials, partly because it showed them how dangerous home ownership could be. The Great Recession also changed how willing banks were to lend money to people with poor credit scores or low salaries, both qualities that often describe millennials.

Millennials are half as likely to buy a home as Gen X was at their age, mostly because they’re more likely to be sub-prime borrowers and have smaller salaries than older generations. When they do buy homes, they opt for value. Millennials spend an average $71,791 on houses compared to $181,256 for Baby Boomers.

However, they do spend more on rent, about $552 a month compared to $375 for Gen X. Renting in many cities is more expensive than owning a home, and millennials who don’t feel ready to buy are at a disadvantage. On top of that, younger generations are flocking to major cities where the affordable housing crisis continues to spiral out of control.

Renting isn’t always a bad thing, according to financial advisor Marguerita Cheng, CFP® of Blue Ocean Global Wealth who frequently works with millennials.

“Rent does represent a larger portion of their income, but we have to understand that if they don’t have a car, they aren’t paying for parking, gas, insurance or a car payment,” she said.

Overall, millennials are overcoming the unique challenges that face their generation and most of them are doing so responsibly.

While some of them are acquiring too much debt and increasing their living expenses, others are doing a good job saving and investing their hard-earned money. Let’s hope their habits rub off on their peers.

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Zina Kumok

Zina Kumok

Zina Kumok is a personal finance freelance writer. Her work has been featured in Forbes, Learnvest and DailyWorth. She writes a blog about how to be mindful with your money. Follow Zina on Twitter and