Millennials Reimagine ‘Keeping Up with the Joneses’

September 10, 2018
3 min read

Spending money on things you can’t afford isn’t a new bad habit, but how Millennials approach overspending is a new phenomenon. A May 2018 survey from Credit Karma revealed that two in five US Millennials have spent money they didn’t have in order to keep up with their peers. This closely aligns with Mintel US research on marketing to Millennials highlighting more than half of US Millennials buy on impulse more than they should. This phenomenon of overspending has been dubbed “Spending FOMO.” The term FOMO (Fear of Missing Out) has become a signature hallmark of younger generations as a way of showcasing their value of experiences over things and the impact social media exposure has toward making younger generations feel like they are constantly missing something.

Every generation has followed a pattern of overspending on things they can’t necessarily afford, the motivators have simply changed. For older generations, the “Keeping Up with the Joneses” mindset created a similar spending challenge. Instead of experiences, the focus was on larger items, such as a home or car, in order to maintain a certain status.
Nearly half of US Millennials agree that seeing what others have makes them wish they had those things.

What’s unique about Millennials?

The desire to represent a certain lifestyle has always been a part of adulthood. The disruption to the pattern is the manner in how lifestyles are viewed as described in Mintel’s 2019 Consumer Trend, “Redefining Adulthood.” Social media made lifestyle expectations more granular and routines such as getting coffee suddenly became something to aspire to. This pattern has spurred the “Spending FOMO” behavior of Millennials. Rather than overspending on one large purchase, Millennials are more commonly overspending on various experiences that can range from an overly expensive coffee to a three-day festival event. Spending an extra $20 might feel meaningless at first, but it can quickly add up when it becomes a pattern.

Nearly half of US Millennials agree that seeing what others have makes them wish they had those things. For Millennials, the amount of people they are comparing their life against is significantly larger than the peer groups of their parents. When you combine the human truth of wanting to keep up with your peers with an overwhelming amount of choice, Millennials are faced with a unique set of financial challenges. From a point of context, one in four Millennials rank family as their number one resource for learning about personal finances. This signals the foundations set by older generations are still being taught, but parents are not equipped for teaching Millennials how to embrace modern lifestyle challenges when it comes to spending.

What we think

Brands have an opportunity to assist Millennials with current challenges that come with adulthood spending. The Robinhood app aims not only to serve as a convenient resource for investing, but also to educate Millennials on understanding the stock market. Visa also started embracing a conversation that reflects how Millennial women think about money and the specific challenges they face.

When it comes to catering to Millennial spending habits, brands have two options: they can simply add to an overwhelming amount of choices, or go a step further and help them understand the deeper value behind a transaction.

Diana Kelter
Diana Kelter

Diana is an Associate Director of Consumer Trends, focusing on North America. Diana joined Mintel as a foodservice analyst before moving to the Trends team. Her role on Trends is a combination of analyzing data and pairing it with global brand monitoring, to determine where macro trends take shape.

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