Yes, Millennials Are Cheap—and This Graph of the Teenage Budget Explains Why

When you don't have to pay mortgage or own a car, life gets cheaper

When Piper Jaffray last surveyed teenagers to learn how they spend money, they got this:

Nobody ever said it was easy being a teenager, but, man, does this make it look fun. Clothes (including shoes), electronics, movies, music, video games, concerts, accessories, food: That is the life. And together, it makes up about 70 percent of the teen budget.

Half a century ago, the difference between the teenage budget and the young adult budget, seen below in 2009, was vast. Teens don't have much money, because they scarcely work, but they can still "afford" to spend on luxury goods—shoes, jewelry, concerts—because they don't have to pay for the things that actually cost money—homes and insurance.

But in the last few years, the young-adult budget has moved away from the adults and toward the young. Twentysomethings, graduating into a recession-bit economy, have less money, and they're putting off, or giving up, on things like cars and houses.

Some economic analysts consider it a mystery that this recession generation can't afford houses and cars, yet somehow manages to afford iPhones and constantly dine out. But if you understand the young adult budget through the teen budget, it's not a mystery at all. If you don't own a house, or drive a car, or have layers of insurance for your family (because you don't yet have one), life is much cheaper. Not cheap, but cheaper. And it creates opportunities to build your own economy around things like mobile technology and restaurants.

 

 

 

Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

A New York City Minute, Frozen in Time

This wildly inventive short film takes you on a whirling, spinning tour of the Big Apple

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register with Disqus.

Please note that The Atlantic's account system is separate from our commenting system. To log in or register with The Atlantic, use the Sign In button at the top of every page.

blog comments powered by Disqus

Video

A New York City Minute, Frozen in Time

This short film takes you on a whirling tour of the Big Apple

Video

What Happened to the Milky Way?

Light pollution has taken away our ability to see the stars. Can we save the night sky?

Video

The Faces of #BlackLivesMatter

Scenes from a recent protest in New York City

Video

Ruth Bader Ginsburg on Life

The Supreme Court justice talks gender equality and marriage.

Video

The Pentagon's $1.5 Trillion Mistake

The F-35 fighter jet was supposed to do everything. Instead, it can barely do anything.

More in Business

Just In