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Tata Capital > Blog > Personal Use Loan > How Millennial Spending Patterns are Different from Their Parents

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How Millennial Spending Patterns are Different from Their Parents

How Millennial Spending Patterns are Different from Their Parents

It’s no secret that each successive generation is a bit different from its previous one. But never has the contrast been so stark as in millennials and Gen X, especially when it comes to their spending habits. As you may know, Millennials (Gen Y) are roughly defined as people born between 1981 and 1996 and are currently the largest living generation. In contrast, Gen X are those born between 1965 and 1980.

To get a better outlook, let’s unpack how millennial spending patterns are different from their parents.

Reliance on loans

Unlike Gen X, who typically believed in paying for things out of pocket, millennials prefer buying things on credit. Whether it’s travel, wedding, or purchasing a new smartphone, millennials prefer taking personal loans to cover the cost. This has a couple of benefits:

A) Millennials can keep their savings intact

B) They get to improve their credit score.

Thus, with their savings untouched, millennials can cope better with financial emergencies. They can also get loan approval quickly and even get affordable personal loan interest rates with a high credit score. It’s a win-win every which way.

Additional Read: 5 Rules For Millennials To Follow While Doing Financial Planning

Short term happiness

According to a 2019 News18 study, about 62% of millennials travel 2 to 5 times a year, and 10% travel 6-10 times a year. But it isn’t only limited to travelling. An increasing portion of millennial income is being spent on short pursuits of pleasure. Just consider the figures: apparel and accessories (21.4%), entertainment and eating out (32.7%), and electronics (11.2%).

The figures aren't surprising given how loans are now widely available to millennials at competitive personal loan interest rates. And yet again, they are in sharp contrast to the previous generation. Where Gen X believed in saving and investing, millennials prefer to live in the present.


The previous generation planned for their retirement through insurance plans, investments, and savings, quite early in their career. Millennials, on the other hand, are falling very short on this front. As per statistics, over 60% of Indians don’t have a retirement account yet.

However, with increasing awareness of investment instruments like stocks, mutual funds, and FDs, millennials are slowly realising the potential of the various investment avenues. With advancements in technology, it has become effortlessly simple to start investing using apps. This improved access to investment options and the desire to earn passive income have made Indian Millennials more aligned towards saving a corpus for retirement.

Additional Read: How Wealth Management Can Help You Plan for a Secure Retiremen

Parting thoughts

When it comes to millennial vs Gen X spending habits, it’s a discussion of experiences vs assets. While the previous generation believed in saving for the future and building generational wealth; in contrast, millennials like spending and living in the moment.

If you’re someone who believes in living in the present, Tata Capital’s personal loan for millennials is just the thing for you! We offer easy-to-meet personal loan eligibility, fast disbursals, and flexible repayments to suit your fast-paced lifestyle.

Not sure how much you can afford? Try our personal loan EMI calculator here.

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