{"id":784856,"date":"2026-07-06T23:25:11","date_gmt":"2026-07-06T23:25:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/784856\/"},"modified":"2026-07-06T23:25:11","modified_gmt":"2026-07-06T23:25:11","slug":"despite-their-reputation-as-spendthrifts-todays-young-adults-are-quite-frugal","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/784856\/","title":{"rendered":"Despite their reputation as spendthrifts, today\u2019s young adults are quite frugal"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Between 2010 and 2023, households under 40 experienced the slowest growth in overall consumer spending.Fred Lum\/The Globe and Mail<\/p>\n

The notion that young adults can\u2019t afford a home because they spend too much money on luxuries such as lattes is backward. Instead, rising housing costs are the main reason why they\u2019re spending less on most consumer goods. <\/p>\n

Despite their reputation as spendthrifts, today\u2019s young are quite frugal. Older generations have in fact logged the largest rises in spending in recent years, according to Statistics Canada\u2019s Survey of Household Spending<\/a>. <\/p>\n

Between 2010 and 2023, the first and last years for which data are available, households under 40 experienced the slowest growth in overall consumer spending, barely keeping pace with inflation.<\/p>\n

An increasing proportion of that spending was allocated to housing. During the period, overall inflation was 35 per cent, but households under the age of 30 saw their shelter-related expenses rise by 75 per cent \u2013 more than twice as fast \u2013 while those in their 30s saw them rise by 58 per cent. <\/p>\n

Priced out of Toronto, Katherine ventured into cottage country to buy her first house at 31<\/a><\/p>\n

In 2010, a household in their 20s would allocate 28 per cent of their budget to housing, but in 2023 this ratio had increased to 35 per cent. And unlike older age groups, households in their 20s and 30s spent less on non-housing expenses in 2023, after inflation, than in 2010.<\/p>\n

Most of the decline in after-inflation spending was in two categories. The first was fashion and accessories, owing to the rise of inexpensive fast fashion and increased thrifting. The other was transportation, thanks to a reduction in car ownership, offset by an increase in public transport and ride-hailing services and a postpandemic rise in working from home.<\/p>\n

There is some truth to the idea that young people spend money on lattes. The younger the household, the more they spend on restaurant snacks and beverages. However, the annual $433 expenditure by households in their 20s represents less than 1 per cent of their spending, with this proportion falling between 2010 and 2023.<\/p>\n

Younger Canadian investors turn to covered-call ETFs amid economic uncertainty<\/a><\/p>\n

Young people have always spent money on small luxuries and habits, however, younger people have chosen healthier, less expensive options. For example, in 1999<\/a>, 30 per cent of adults between the ages of 20 and 24 were regular smokers; by 2022<\/a>, this had fallen to less than 8 per cent, though some of this was offset by a rise in vaping.<\/p>\n

Alcohol consumption among young people has also fallen substantially since the late 1970s<\/a>, particularly for men. Between 2015 and 2024, the percentage of men between the ages of 18 and 34 who abstain from alcohol nearly doubled<\/a> to 24 per cent in 2024 from 12 per cent in 2015. This has been offset somewhat by increases in cannabis consumption. <\/p>\n

Over all, households in their 20s spent approximately $1,700 on alcohol, tobacco and cannabis in 2023 \u2013 the lowest amount of any age group except seniors \u2013 which represented 2 per cent of their income.<\/p>\n

Shifts have occurred in other categories. Youth travel more than in past generations. However, the cost of flights in real terms have fallen over the decades, and as young people are far less likely to own cars than in the past, that lack of monthly car payments more than offsets the cost of an occasional flight.<\/p>\n

It is also true that younger generations attend more expensive concerts than in the past and subscribe to streaming services that were unavailable to previous generations. However, they also go to the movies less often, are far less likely to pay for cable television, and pay for less prerecorded music.<\/p>\n

First-time buyers in their 20s bought an Etobicoke townhouse to stay close to family<\/a><\/p>\n

Those of us in Generation X can remember routinely paying $15 or $20 for a CD in the early 1990s ($30-$40 in today\u2019s dollars), an expense that today\u2019s young don\u2019t face. <\/p>\n

This reduction in overall consumer spending is not unique to Canada. In 2018, the U.S. Federal Reserve released a study titled \u201cAre Millennials Different?<\/a>,\u201d which found that lower levels of spending by millennials than past younger generations were not caused by an increased preference for saving, but rather that they simply had less disposable income.<\/p>\n

This decline in young consumers\u2019 spending in North America has not gone unnoticed<\/a> by financial institutions and retailers. It has created a cottage industry among marketing experts to figure out how to get this generation to open their wallets. <\/p>\n

In a grim irony, this lack of non-housing spending by young people acts as a headwind to sectors such as retail, entertainment and hospitality, which have traditionally been sources of employment for the young.<\/p>\n

Mike Moffatt is the founding director of the Missing Middle Initiative<\/a> and co-host of the Missing Middle podcast<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Between 2010 and 2023, households under 40 experienced the slowest growth in overall…\n","protected":false},"author":2,"featured_media":784857,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[901,888,902,879,877,903,45,49,48,876,895,896,891,878,875,46,549,295,894,887,914,880,881,893,889,890,884,904,885,909,910,912,907,911,905,908,882,898,899,714,897,906,865,61,900,892,886,883,913],"class_list":["post-784856","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-alberta","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-business","tag-ca","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/784856","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=784856"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/784856\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/784857"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=784856"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=784856"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=784856"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}