Busting myths about Millennials and their spending habits

Julia Pham


April 12th, 2017

Just because Millennials like coffee and holidays does not mean they’re irresponsible with their money. Julia Pham busts some myths about the spending habits of Millennials and explains how they’ve been dealt with the short end of the stick.

There is no shortage of articles that claim that Millennials are lazy, fickle people who spend frivolously on overpriced brunch and trips overseas. Possibly the most incendiary of these articles was Bernard Salt’s column in the Weekend Australian, titled ‘Moralisers, we need you!’, which waxed on about how Millennials are spending too much on smashed avocado when they should instead be putting money towards a deposit on a house.


The article spawned a hundred thinkpieces and op-eds, a thousand funny tweets, sarcastic responses such as ‘I stopped Eating Smashed Avocado and Now I Own A Castle’, and even a sequel, this time shaming Millennials for spending too much money on holidays to Bali. Older Australians chastised Millennials for being too materialistic and entitled, and younger Australians blamed grandpa for creating an unaffordable housing market. As the dust settled, the only thing that changed was that I couldn’t eat smashed avocado unironically anymore.


While the original column may have been tongue in cheek, does Salt actually have a point? Are Millennials spending too much on luxuries and when they could be saving more of their money?


Data from the ABS, put into a handy graph by The Guardian, shows that the proportion of income spent on housing by 25 to 34 year olds is actually increasing (Figure 1). Figure 2 below also contradicts Salt’s claim that young people now are spending too much on food – 25 to 34 year olds in 1984 were actually spending more of their income on food compared to those today. [1]


Figure 1. Expenditure on housing as a percentage of income, 25-34 year olds

Source: The Guardian



Figure 2. Food expenditure as a percentage of income, 25-34 year olds


Source: The Guardian


When it comes to luxuries like overseas travel, Millennials spend much more than other cohorts. Millennials spend a total of $11.3 billion is overseas every year, fifteen per cent more than Baby Boomers and 66 per cent more than Generation X. [2]


But spending big does not equate to being fiscally irresponsible. Westpac’s 2016 Travel Finance Report shows that 70 per cent of Millennials start saving for a trip at least 8 months in advance. Once overseas, they also make sacrifices to save money – at least 50 per cent will walk instead of taking a bus, and 28 per cent are willing to forego seeing a few tourist attractions. [ibid.]


Contrary to public perception, Millennials are actually the biggest savers. Suncorp Bank’s 2015 Australian Savings Habits Report found that Australians aged 25 to 34 are putting aside on average $533 per month (12.7 per cent of their income), which is more than the national average of $427 (11.5 per cent of income). [3] The household savings rate for 25-34 year olds has also increased from 5.6 per cent in 2003-4 to 12.7 per cent in 2009-10. [4] In the same period, the savings rate for 15-24 year olds has increased from 1 per cent to 5.4 per cent. It is clear that as Millennials come of age in a post-GFC world, they are more cautious with their money and are saving more than young people before.


Alright, so Millennials are actually quite fiscally responsible, a fictitious grandma concedes. But my generation had it tougher and we still managed to buy a house!


It’s probably no surprise to anyone that home ownership has declined among 25 to 34 year olds. In 1981, 60 per cent of 25-34 year olds owned their own home, as opposed to only 48 per cent in 2011. [5]


In the last two decades, the growth rate of house prices has greatly outstripped average weekly earnings (Figure 3). The boom in house prices, which begins in 2000, has meant that Baby Boomers have been lucky recipients of windfall capital gains, while first-home buyers, Millennials, are finding it harder and harder to own their own home.


Figure 3. Real house prices, Real GDP per capita and Real average weekly earnings, 1960-2011 (Index 1960=100)

Source: Yates (2011)


Baby Boomers also had it lucky when it came to higher education. Between 1974 and 1989, university degrees were free. Currently, average annual cost of a degree is around $10,000 per year. [6] As postgraduate studies become the norm, young people are inevitably going to be saddled with even more debt.


It’s not getting any better either.As a result of the 2016 cuts to higher education, debts will only get bigger as students see their contribution amounts increase. [7] Under the previous system, someone with a four-year engineering degree would take on average 14 years to repay their loan. This has now risen to 20 years. [ibid.]


The figures show that Millennials are far from the entitled and materialistic big spenders they’ve been made out to be. With the Australian dream fast becoming the Australian pipe dream, instead of judging Millennials on how they spend their money, just let them live their lives in a world where they can’t afford a place to live.



[1] Jericho, G. (2016). I could get outraged by this boomer-millennial war, but I’d rather look at the evidence. The Guardian. Available at:

[2] Westpac, (2016). Millennial travellers spend $11.3 billion overseas per year. Available at:

[3] Suncorp, (2015). 2015 Australian Saving Habits Report. Available at:

[4] ABS (2011) Household Expenditure Survey 2009-10 CURF, catalogue number 6503.0, Australian Bureau of Statistics

[5] Daley, J., Wood, D., Weidmann, B. and Harrison, C., 2014, The Wealth of Generations, Grattan Institute

[6] Pash, C. (2014). Australian Universities Say Some Students Can Expect To Be In Debt For 20 Years. Business Insider. Available at:

[7] Workman, A. [workmanalice]. (2017, April 10). Simon Birmingham confirms to Sky News the government will be cutting University funding in budget an introducing partial fee deregulation. [Tweet]. Retrieved from



Figure 1. Jericho, G. (2016). I could get outraged by this boomer-millennial war, but I’d rather look at the evidence. The Guardian. Available at:

Figure 2. ibid.

Figure 3. Yates, J. (2011) ‘Housing in Australia in the 2000s: On the Agenda Too Late? ‘, The Australian Econcomy in the 2000s, Canberra. From



The views expressed within this article are those of the author and do not represent the views of the ESSA Committee or the Society's sponsors. Use of any content from this article should clearly attribute the work to the author and not to ESSA or its sponsors.

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