Frugal millennials leading way in hunting for bargains this holiday season
Robert Kissell, Courtesy Robert Kissell
Robert Kissell graduated from college in 2010, is newly married and is a self-confessed holiday shopping junkie.
Like other millennials (he was born in 1988), he is tech-savvy. But also like other millennials, he has student loan debt. He says he is slated to pay it off in 10 years if all goes according to plan — although it takes between 25 to 30 percent of his income as an Internet marketing specialist at a real estate company in Southern Shores, N.C.
Kissell's experiences affect how he thinks about shopping this holiday season. Like other millennials, frugality and staying out of debt are the values he is trying to stick to.
A new study by personal finance website NerdWallet.com found that millennials are more frugal than their parents. Twenty percent of shoppers 30 to 44 years old say they'll go into debt this Christmas season, compared to only 7 percent of people between 18 and 29.
This year, Kissell is scouring the deals for a television for his home. He also is looking for other great deals on presents for his family. He plans on spending about $600 total on gifts.
"I've got a pretty good knack at finding deals," he says.
He likes getting deals on gifts not just because they are less expensive, but because on the surface they look like he spent a lot more.
Kissell says he saw all the economic problems of the recession. Most of his peers, he says, are dealing with pretty big school debt. Not as many of his peers have jobs yet. He has credit cards, but says he uses them mostly for credit building — not for debt. He has enough of that with his student and car loans.
Why so frugal?
Anisha Sekar, vice president of credit and debit products at NerdWallet, says one reason behind millennials' shopping frugality is debt.
"The purchasing burden is usually not as hard on millennials," Sekar says. "It isn't as hard as it is for people who have kids and grandkids. They have to go all out for their children."
Sekar says the notion that millennials are debt-ridden really only applies to student loans, not credit card debt.
"Younger folk have lower credit card debt than any other age cohort," she says. "That shows they are able to distinguish between an investment and a consumption purchase. Millennials aren't as willing to go into debt for short-term gain, but they are willing to go into debt for a long-term investment such as education."
But that student loan debt has a big effect, Sekar says.
"If you are under financial pressure, you don't want more," she says.
Chelsea Krost, 22, is a millennial lifestyle expert. She earned that title not only by being a millennial herself, but through her radio and television shows and through many other media appearances talking about her generation.
Krost sums up the situation millennials find themselves in: "They are graduating with $30,000 of student loans. The job market is extremely fierce and competitive. The unemployment rate among millennials is around 13 percent. And a lot of us are really looking to save a dollar where we can — and have to because the future is uncertain."
Looking for deals
One way Krost says millennials deal with an uncertain future is to look for ways to save money wherever they can — such as grabbing a deal from online coupon website Groupon or other discounts on apps.
Fashion is a passion for Krost, she says.