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What Millennials Are Actually Spending Their Hard-Earned Money On

Spoiler: It’s not just avocado on toast
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It’s often claimed that millennials are disengaged with their finances and spend their money poorly.

In 2017, an Australian real estate mogul told young people to stop buying avocado on toast in order to save for a deposit on a home. It didn’t go down well.

Millennials are also accused of wanting things handed to them, that they should immediately be placed on a £50k a year salary, are workshy and that they have it better than many generations before them.

But actually, millennials are often cited as the poorest generation for decades and have many new expenses and costs to deal with that previous generations didn’t have.

We spoke to some of today’s millennials to find out where their money goes.


Over £50bn was paid in rent in 2017 with 65% of 16-24 year olds and 42% of 25 to 34-year-olds now renting privately. The average rent is around £650 a month in city areas, dropping to £550 elsewhere. With the average UK salary at £23,300, according to The Institute for Fiscal Studies, this is a squeeze. Dubbed Generation Rent it is felt they will never catch up with the previous generation when it comes to their standard of living.

Belle, 23, is certainly feeling the pressure that Generation Rent creates. She lives in Leeds and earns £21,600 a year as an IT analyst, but sees a large chunk of her money go straight out the door with almost a third of her monthly income being spent on her rent.

House deposits

A third of today’s millennials are likely to be in rented accommodation all their lives. For those that try to get on the property ladder, the average deposit for a house now sits at over £40k. Despite reported falling numbers of millennials becoming first-time buyers, some are bucking the trend and putting their money into bricks and mortar.

20-year-old Nate told us: “I’m saving up to £600 a month from my take home pay of £1,800 a month because I am saving for a house deposit. I can only afford to save that much because I live at home.”

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Despite criticism that millennials don’t save, research this year claims the opposite. Millennials are saving, but with different goals to previous generations. They are saving for emergency funds, a savings cushion, financial freedom and travelling.

The research shows that “millennials are being sensible with their money and thinking about financial security. However, the current economic climate, and a change in lifestyle – people marrying and having children later – means millennials are favouring experiences over possessions and have different financial priorities at this point in their lives.”


As spending across fashion and food rose last year there has been recognition that the millennials mindset towards fashion is different. They want brands to be ethical as well as fashionable. In short they want to buy less, buy better, buy authentic if they can afford to. Usually, more ethical clothing is more expensive and therefore adds a premium (and extra cost) to millennials.

“I buy clothes every three months and spend roughly £120 a time,’ says Chloe, 23, a marketing assistant, who earns £18,500 and lives in Leicestershire. “I like to be up to date but I won’t spend too much.’

Having fun

Every career expert would recommend a healthy work/life balance and millennials are no different. So, although many surveys suggest that millennials are the party-at-home generation (due to closure of many nightclubs and the rising cost of alcohol) many of those we spoke to would spend between £200 and £250 a month going out with friends.

“I do make an effort to go to a city for a night out every month and we can easily spend £200+ on that,’ says Jules, 24, an IT developer, who earns £28,000 a year and lives in Brighton. “But going out is expensive which is why it’s probably only one big night a month. With entry fees, cost of drinks, cabs, it all adds up.”

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Mobile phones

Like it or not, smartphones are pretty much an essential communication tool for most people in the UK. Modern life for young people almost demands the need for smartphones with the advent of video calling and social media.

With handsets costing upwards of £400, they are expensive, which is why many millennials opt for monthly budget plans with a provider. Each provider has a range of fluctuating deals, but most millennials will have a high-end smartphone as they demand quality streaming, photography and video capability. With average monthly tariffs for a current handset between £36 and £53 a month, this is seen as must-have (and expensive) cost.

“I shop around for good deals,” says Cameron, 23, who earns £20,000 as a personal fitness instructor, from Manchester. “But I won’t compromise on performance for the sake of a few quid. I run my banking and my business on my phone, it has to do the job well.”

Looking good

Hair and beauty products are a big expense for millennials. Young women typically spend over £400 a year on beauty products while millennial men have embraced the industry much more than previous generations with grooming treatments becoming increasingly popular.

“I get a haircut every week and have a wet shave. It keeps my skin looking good and I do buy products to moisturise, too,’ says Jacob, 27.

“I spend about £70 a month on beauty treatments,’ says Izzy, 23, a digital designer, who earns £28,000 a year and lives in Hertfordshire. “I do treat myself to lash extensions, which are expensive, but it means I don’t need to buy mascara so it kind of balances itself out.”

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The entertainment landscape has radically changed over last 10 years. The shift from normal TV to online streaming and swapping CDs for MP3s has altered the spending patterns of millennials compared with other generations.

As with any industry change, it’s ripe for big brands to make new cash. As a result, long gone are the days where a TV license gave you everything you needed. Now there are multiple services vying for you cash and therefore the content is now split between them. So, if you want access to the same amount of content, you’ll need multiple subscriptions to get it.

From Netflix, Amazon Prime and NowTV to Apple Music and Spotify, the multiple monthly subscriptions soon add up.

Salim, 22, who works as a trainee dental technician and earns £18,750 tells us that having a streaming service is a ‘must-have’.

“You have to have it, otherwise you aren’t in the conversation about what’s current.”

From these conversations, it seems that millennials don’t just fritter their hard-earned money away on avocado on toast and other trivial items. The millennial generation is just as hard-working and just as savvy with their cash. The difference between them and previous generations seems to be that the landscape of what is needed and important has slightly shifted in the modern day.