Minor indulgences can cause major financial problems — even if you are spending money on other people’s happy events. Younger Americans appear to be the most profligate.

• Millennials spend more than an average of $2,300 per year than older generations on five key items: groceries, gas, restaurants, coffee and cell phone bills

• Millennials spend $233 per month on meals versus $182 for older generations, and $161 on cell phone charges versus $135 for older Americans

• But millennials spend just $80 per month, compared to $114 for those aged 37 and up, on TV services like cable, satellite and steaming/subscription

That’s according to a recent study released by personal-finance site Bankrate.com. “Millennials are falling victim to common financial vices, such as spending money in coffee shops,” the site concluded. The average millennial dines at a restaurant or buys take-out food five times per week and nearly 30% say they buy coffee at least three times per week. “Often, it’s the minor, habitual expenses, such as take-out and alcohol, that wreak havoc on your budget,” the report said.

Why should more millennials be saving their money?



Millennials have bigger problems. They shoulder more student loan debt than any other generation and face house prices that are far higher than their parents did at their age in a post-recession environment of stagnant wages. Student loan debt has reached $1.3 trillion as the cost of college has soared. And spending no more than 30% of their income on rent or a mortgage, which was deemed a golden rule for decades, is now almost impossible for many young Americans.

While one-quarter of millennials and Generation X-ers lack any emergency savings, according to a separate Bankrate survey released last month, younger millennials (those aged 18 to 26) appear to have learned from the lessons of their older siblings: They have the highest propensity to have enough to cover 3 to 5 months of expenses (31%). Generation X is most likely to have some savings, but not enough to cover three months’ expenses (28%).

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What have other data found on spending habits?

People younger than 35 and those with higher household incomes are among above-average users of digital ordering with apps like Seamless and Grubhub, according to data released last March by Port Washington, N.Y.-based research firm NPD Group. The number of phone and internet orders for restaurants surged 18% last year to 1.9 billion. Some 50% of digital orders come at dinner time, while 35% includes parties with kids.

Restaurant food is still the No. 1 thing that Americans spend their money on, according to the Principal Financial Group’s annual Financial Well Being Index, released last December. They spent 24% of their budgets on restaurant food, up from 22% two years earlier, versus 20% on groceries and 18% on entertainment. For lunch alone, Americans spend an average of $53 a week, or $2,746 a year. And that doesn’t include digital subscriptions, which often exceed the cable bill.

Why should we care about young people eating out?

Younger Americans who tend to earn less and have fewer savings than their older cohorts are more financially vulnerable. Nearly half (49%) of millennials aged 18 to 36 have insufficient funds to cover the costs of a $500 emergency compared to 34% of older adults, according to the “HomeServe Biannual State of the Home Survey” released last week; Harris Poll surveyed 2,000 adults. What’s more, nearly one-fifth of millennials described the state of their finances as “terrible or poor.”

But the ramifications go beyond the financial. Eating out can be bad for your health. People have less control over what goes into their meals when they order in. Americans get most of their daily sodium — more than 75% — from processed food and restaurant food, according to the Centers for Disease Control and Prevention. Such foods are high in sodium, so it’s difficult to reduce your daily sodium intake if you don’t cook your own food, or if you eat pre-made sauces or meals.