On the outside, millennials may seem to be shopping more compared to older consumers, but a new report suggests that they are actually spending less.
The findings of the TD Bank survey revealed that while people aged 18 to 34 eat out more and do more shopping, on the average, they spend about a quarter less than those who are aged 35 and up.
TD Bank’s Consumer Spending Index survey, which asked more than 1,500 consumers in the United States to share their monthly spending habits, showed that millennials eat out an average 13 times per month and spend about $100 monthly on food.
Older consumers, who eat out only half as often, spend comparatively more on food. The Gen-Xers (aged 35-55) spend $120, while Baby Boomers (aged 56 and older) spend $140 per month.
Overall, millennials spend more than $26,000 on average per year on basic necessities and some entertainment and travel expenses, compared with $32,000 for the average U.S. consumer.
Experts believe that, in general, younger consumers are more conscious in spending their money and are more inclined to save.
The only spending exception, the study found, was coffee.
On average, millennials purchased coffee 11 times per month for a total of $80 per month, an amount that is almost double the average for older consumers. Gen Xers bought coffee an average of seven times per month while Boomers did the same about five times per month.
TD senior vice president Troy Dennis attributes the findings to the “on-the-go” culture of millennials. Dennis told CNBC that younger consumers, who have less money to spend, depend on instant, cheap conveniences such as coffee and fast food.
The research also found that millennials tend to use cash more often and use credit cards less than the average consumer.
That approach, according to Dennis, keeps them from building a strong credit history. He urged younger consumers to use credit more often to build creditworthiness, which is necessary for future loans.