For all intents and purposes, I’m a “millennial”. Part of a group of people around the world born between the early 80’s and late 90’s. Our demographic has made so many changes to the way that people live nowadays. We have changed the way that technology is used and even changed spending habits not only for our demographic but for the generation after us. Us millennials value experiences over diamonds. But there’s more to these changes. Here’s how and why we don’t spend like the generations before us.
What’s the Difference?
The difference between our spending habits and those of the prior generations is very evident. Over 50’s home and travel insurance provider, Insure4Retirement found that 73% of people who completed an insurance quote and listed jewellery under the coverage required owned over £5,000 of precious metals and gems. Further data from the Wealth and Assets Survey 2016 (WAS) found that households with the greatest “physical wealth” (based on insurance terminology) were people who had reached retirement age. They had on average accumulated over £66,900 in household assets.
Where do Millennials Stand
Unsurprisingly, the WAS survey showed that those in the age range of 16-24 have the lowest “physical wealth”. With the average age of people getting on the property ladder being 30 years old, it’s not surprising that millennials just haven’t had enough time to accumulate possessions and “physical wealth”.
The gap between millennials and the older generations, such as the Baby Boomers, when it comes to physical wealth, is a big one. While the older generations new the value of investing in things like diamond jewellery, millennials have a completely different approach of where they spend their money.
Experiences Over Diamonds
Despite the practical reasons for the spending gap between generations, there are also other factors at hand. It really comes down to millennials preferring to spend their money on experiences and not valuables, no matter how much of a savvy investment they may be.
“Millennials gravitate toward spending money on experiences, and not things” according to Sarah Berger of TheCashlorette.com. The younger generations spend most of their disposable income on travelling to destinations like Thailand and Bali than on fine jewellery.
How Millennials Have Influenced Change
Millennials have influenced where other demographics spend their money too. And those changes have steered more towards experiences than possessions. According to the Office for National Statistics, households aged between 65-74 spend nearly 18% (a fifth) of their income on recreational and cultural activities.
Over 65’s are spending the highest percentage of their income on package holidays. More than they have in a long time! This change may be due to the availability of more reasonable travel insurance for older people with medical conditions.
With the cost of living rising and rising and eating more into the wallets of UK households, the retail and jewellery industries are competing now more than ever for attention from the younger generations. For those of us aged between 18-36 about 30% of our income goes on rent, in comparison to the 10% our grandparents would have spent in the 1960’s! Which leaves us with less to spend on luxury possessions. Which in turn leaves us spending our disposable income on Instagram-worthy brunch spots instead.
The diamond industry has reportedly slowed as our Millennial consumers are far-less enamoured by traditional diamond jewellery than their parents. “Diamond jewellery appears to be low on the buying lists” of today’s youth according to Des Kilalea, an analyst from RBD Capital Market. That makes for a worrying situation for the jewellery industry, as the Millennial generation edge towards becoming the most active consumer group.
According to Insure4Retirement, whose customer base is predominantly made up of baby-boomers, 50% of all specified items of jewellery are diamond. If the jewellery industry can’t find a way to grip the hearts of our youth, we can expect to see these figures decrease with each decade, until the once much-coveted diamond becomes yet another icon of a bygone era.