Millennials may not be spending on clothes, diamond engagement rings or houses, but they're dishing out the cash when it comes to eating out. These young Americans entering the workforce dine out at restaurants or buy take-out food 5 times a week reported Bankrate.com. Cooking at home, apparently, is not their strong suit.
Americans as a whole are doing better with these financial vices, with 59% saying don’t buy any brewed coffee or tea within the typical week. In addition, 73% say they don’t buy alcoholic drinks at bars or restaurant during the week. However, millennials break the trend, seemingly caught up in the small expenses.
“Often, it’s the minor, habitual expenses, such as take out and alcohol, that wreak havoc on your budget,” said Sarah Berger, cashlorette at Bankrate.com, in a statement.
Berger said small frivolous spending tends to be a trait among younger consumers. This might be because at this young age, many of them don’t have a family structure in place, she said. They probably spend a lot of time on dates or with friends, leading them to spend more money outside the house. While spending on avocado toast may not be the reason why millennials can’t afford a mortgage, it doesn’t hurt to cut back a bit.
“[Millennials] want to be more financially independent,” Berger said. “They definitely have the right mindset. It’s just cutting back on those little expenses and then putting that money in a place that they can save it.”
She recommended using an envelope budget to prevent overspending on small items. By putting a set amount of cash into separate envelopes designated for activities such as eating out, buying coffee or going out for drinks, the gravity of the amount one spends on small items can be felt. It’s also easier to see visually, how much money one has left, Berger said.