We're often told of the importance of saving for the future, yet it seems that today's younger generation may not be taking it on board, with research from VoucherCodes showing that millennials are choosing to spend their disposable income on the here and now rather than saving up for bigger life purchases.
The research found that those aged 18-34 put just 9% of their monthly disposable income away for future savings, with 29% claiming that they prefer spending their money on 'enjoying the moment' instead.
For many, it's all about experiences, with almost half (46%) of those surveyed saying they prioritise spending on brunch or dinners out, while 29% choose to spend their disposable income on travel. This is far beyond the typical idea of the boozy millennial, with this generation spending just £37 a month on nightlife, compared with £76 per month on eating out and £63 per month on travel.
Even a weekend of home improvement beats a night out on the town, with the typical millennial spending £56 each month on DIY, gardening and homeware-related purchases. Clothes are also high on the list of spending priorities (£71/month), with other must-have expenditure including streaming services such as Netflix (£30), beauty products and treatments (£29), entertainment (£29) and mobile apps (£28).
"Daunting mortgage rates and rising house prices seem to have prompted young Brits into enjoying their money rather than worrying about what they can't afford," said Anita Naik, Consumer Editor at VoucherCodes. However, this desire to live for today means that most aren't thinking about tomorrow, with only 21% saying they enjoy spending money on things to set themselves up for the future.
Indeed, another 21% believe that they'll never be able to buy a property of their own, and just 4% expect to do so in the next five years, perhaps highlighting that they see no point in saving for the future when they could enjoy their cash today instead.
Yet that doesn't mean they're not making sacrifices to fund their instagrammable lifestyles, with 86% saying they've traded other luxuries to make up for their spending. Four in 10 live with their parents to cut back on rent, while 34% walk or cycle to work to reduce transport costs – but what if those cutbacks were put towards the future instead?
By putting that extra money into a savings account that's dedicated to the future, rather than spending it all on the present, it wouldn't take long to build a suitable fund that could be put towards a house deposit, or even to save for retirement if you're thinking really far ahead. This is where the Lifetime ISA could come in, which is specifically designed to save for a first home or pension, and could therefore be ideal for the millennial age.
It may seem like an insurmountable task, and of course everyone wants to enjoy themselves while they're young, but a bit of foresight can go a long way to ensuring that you're ready for the future as well as enjoying today.
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