With Black Friday sales and Christmas approaching, Britain is set to spend £2.2 billion in the next two months. But just how much are people saving and spending each month in order to prepare? New research uncovers how much different generations are spending or overspending compared with their disposable income.
Property is certainly more expensive than ever, and interest rates are notably low at the moment – both of which make it hard for younger people to be as well off as their parents or grandparents. But there is a noticeable trend that younger people might not be acting with a clear view towards saving for the future. Whether it’s higher spending on unnecessary purchases or an approach to spending which means that they run out of money when they need it, their spending habits may not always be in their best interests.
While the average Brit puts away £183.50 into savings each month, the research revealed which generations are the savviest when it comes to savings:
1. Generation X – those born between 1965 and 1976 turned out to be the biggest savers, stashing £216.60 on a monthly basis.
2. Baby Boomers – those born between 1946 and 1964 managed to save around £187 each month.
3. Generation Y/Millennial – born between 1977 and 1995 – surprisingly aren’t too far behind with savings compared to older generations, saving £176 each month.
4. Traditionalists – born in 1945 or earlier, research shows they save £165 on a monthly basis.
5. Generation Z/Centennials – born in 1996 or later, the digitally-savvy were saving the least at £105 each month.
Praying for Pay Day
Waiting for payday can be a struggle for many, but between the generations, there were some distinct differences between who runs out of money before the end of each month.
Millennials are the most likely to run out of money before payday – with 24% saying this is the case, and the majority of these blaming it on their expensive spending habits rather than an overall lack of funds.
Generation X and Centennials closely followed behind, with 20.5% of both generations running out of money before payday. Baby Boomers and Traditionalists were the least likely to run out of money before the end of the month – with only 8% of Baby Boomers and 3% of Traditionalists struggling towards the end of the month.
Bills, Bills, Bills
Whilst it will come as no surprise that getting older generally lines up with smarter spending decisions – it isn’t true in all cases. For many, our money will be spent on bills, rent, mortgages and other necessary costs, however, some generations also struggled with impulsive buys.
- Millennials spend £150 on unnecessary payments each month, with 61% feeling they overspend on entertainment, particularly on activities like going to the cinema or nights out in particular.
- Surprisingly, Traditionalists were the second most likely to spend on unnecessary payments, totalling £141 each month. However, this appears to be unrecognised within the generation, as 69% felt they didn’t overspend on anything.
- Baby Boomers spend around £132 on unnecessary payments, whilst Generation X and Centennials spent the least at £114 and £119 respectively.
Britain’s Guilty Pleasures
Everyone has their indulgences, however – the categories most overindulged in across all generations were:
Eating Out – popular across the board, 25% of Brits say that going out for a meal is how they choose to treat themselves, regardless of earnings.
Household Shopping – whether it’s the quality or the quantity of shopping items, 15% of people like to put a bit of extra money into their shopping trips.
Entertainment – 14% say that going out and doing activities like the cinema or sports is where they’re dropping a bit too much of their earnings.
Across the generations, all said that if they managed to cut back on their overspending habits, they would be most likely to put the extra money into savings – but other top options included paying off debt, and in the case of 50% of Traditionalists (born 1945 or earlier), go on holiday. This was also popular among Baby Boomers – but only for 25% of them.
