If you think that today’s teenagers are still Millennials, you’d be wrong. The oldest Millennials are now well into their late thirties and today’s teenagers are Generation Z. Growing up in a post-9/11 society, Gen Z is shaping up to be very different from Millennials. And as the oldest are now graduating college, they’re starting to exercise their spending power and they’ve got very unique spending habits.
What is Gen Z spending money on?
According to a recent Vice article that interviewed seven different Gen Zers, the most common “non-essential” these teens spend money on is food, particularly eating out and trying new restaurants. One respondent said that he budgets $100 a week on eating out, but often surpasses his budget and spends upwards of $120 per week.
Additionally, several said they consider it “worth it” to spend money on their friends. Most of them cited skincare products as a major expense in their lives – even more than healthcare.
Gen Z wants to own rather than rent.
Unlike their Millennial predecessors who rely on renting their homes and using services like Uber and Lyft, MediaPost found that Gen Z has a sense of pride in ownership.
Referencing the Gen Z Automotive Study, 92% of Gen Z owns or plans to own a vehicle. They are also prepared to sacrifice. Gen Z is willing to give up social media (72%), new clothes (63%) and their cell phone (33%) if it means owning a car.
Similarly, a recent Zillow Housing Aspirations Report found that Gen Z desires to own a home, despite the fact that most of them aren’t even old enough to rent a place by themselves. The report found that 57% of Gen Z renters would consider buying instead of renting, even though the median household income for Gen Z renters is $27,827, with 44% making less than $25,000.
It will be interesting to see what happens when the bulk of Gen Z enters the workforce in a few years and gain spending power. Will they turn their aspirations to own homes and cars into reality, or will they fall victim to the same financial holes that tripped up the Millennial generation? Only time will tell.
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