What spending did you regret today? Going to the movie theater to see a new first-run flick? Buying plane tickets for an upcoming vacation? Splurging on a latte? Buying day-old sushi at the convenience store?
We’re pretty sure that everyone would regret the sushi – but given the other choices, if you are a millennial you are likely to regret the coffee more than the plane tickets or the movie. That’s the inference of a new survey from Common Cents Lab, Duke University’s financial research laboratory, in partnership with financial app Qapital.
Almost 1,000 millennials aged 20-26 were asked about the types of purchases that they regretted making. In general, millennials had few regrets and were satisfied with most of their purchases. Over 80% were satisfied with healthcare spending or spending to support their community. Rent and utility payments, entertainment expenses, educational expenses, groceries, and paying down debt all generated satisfaction ratings between 65% and 80%.
What do millennials regret the most? Bank fees were the overwhelming choice at a 97% dissatisfaction rating. You may not be able to avoid interest charges every month, but you can always avoid late fees with simple diligence. Millennials seem to be annoyed at paying a completely avoidable fee (as most people should be).
The next four items on the millennial purchase regret list were all related to impulse buys. Half or nearly half of survey respondents regretted purchases at coffee shops, restaurants, and convenience stores, while 62% regretted fast food purchases.
Millennials don’t seem to mind larger purchases or recurring purchases. According to the survey, millennials were 9% more satisfied with large purchases than with smaller ones, and on average, they regret recurring expenses 10% less than direct, non-regular expenses. It’s the simple buys that seem to bother millennials the most. Perhaps that’s because, like bank fees, these purchases require simple willpower to avoid.
It’s possible that millennials look at many of the larger spending categories as types of investment, more fulfilling with respect to either finances or sense of well-being. They are either investing in others (community purchases), themselves (entertainment, travel, gym/fitness, educational expenses), or are dealing with basic costs of living (rent, bills, groceries). Coffee shops, restaurants, convenience stores, and fast food places may not provide value in the eyes of millennials compared to the money spent there.
Millennials may regret making impulse purchases and inherently know they don’t receive value from them, but they don’t regret impulse purchases enough to stop making them – at least not yet.
A recent Bankrate survey found that with respect to five key purchases – gas, groceries, cell phone bills, coffee, and restaurants – millennials average $2,300 more per year as compared to older generations. A significant amount of that $2,300 falls into the categories that millennials regret, perhaps because they know that could be put to higher value uses (such as paying down debt).
It’s a positive sign that millennials tend to regret smaller impulse buys because these purchases are habits they can ultimately control – and the first step to controlling a bad habit is recognizing that you have one. As millennials mature and take on more financial responsibilities, they are more likely to reject impulse purchases and set the savings aside for various funds (such as emergency funds, retirement, and down payments toward larger purchases).
On the other hand, if your lack of impulse control made you think that convenience store sushi was a good idea, you may have more work to do to achieve your goal – and you probably should assess your judgment skills.