Kids are so simple. You toss them a toy, or put them outside, or set them down in front of a TV, and they can have hours and hours of relatively inexpensive fun. And then they become teenagers, and suddenly they need money to go to the mall, or to the movies, or to go shop.
And they’re not spending their own cash. According to a study by Piper Jaffray, teens from average economic backgrounds get 62 percent of their spending money from their parents, with teens from wealthier parents relying on their parents to foot 69 percent of the bill. Still, that’s a marked decrease from back in 2011, when those numbers rose as high as 70 and 75 percent.
What makes modern teenagedom really interesting is that so many fringe interests have gained mainstream accessibility: Pretty much everybody plays video games of some kind, and nearly everyone has the same virtually limitless access to whatever music, films, and other entertainment that they want. Statistics about how teens spend money, therefore, are likely more representative of the whole than ever before.
So how do teens spend money? Well, whether they’re working weekends or pilfering money from their parents, they’re mostly spending their money on having a good time. And who can blame them? What’s most interesting is exactly where they prioritise their spending. One of the top items on this list has never been number one before, suggesting a bit of a shift in how today’s teens want to spend their time.
Here are the seven biggest spending categories for the modern teen, arranged in ascending order of the percentage of spending they represent. Stats courtesy of piperjaffray.com.
7. Video Games/Systems – 7%
There’s a reason why video game franchises are consistently setting profit and sales records. An exciting, big-budget game can sell millions of copies apiece, and at a minimum of $60 a pop, that translates to a huge payday for the companies behind the games. Teens are a huge market for video games, their love of both traditional gaming systems and cheap mobile entertainment making them the primary target of gaming companies.
According to the study, 65 percent of teens either have, or are interested in purchasing, a gaming console, and more than 85 percent of teens play mobile games on their smartphones or tablets. Still, given the cost of most games, it’s a bit surprising that this number isn’t higher.
6. Electronics/Gadgets – 8%
With all the teens toting their Macbooks and smartphones around it comes as no surprise that electronic devices account for a big part of their spending. Electronics, though, are also taking over as the method by which teens acquire the other stuff in their lives. Amazon, Nike, and eBay are among the top online stores visited by teens, suggesting there’s a wide spectrum of things that teens want to purchase from the comfort of their own home.
There’s also a huge level of cohesion among teens in terms of which brands of technology they’re after, indicating that advertising and trends heavily influence the demographic as a whole. With headphones, for example, a full 46 percent of teens surveyed responded that they would next want to purchase a product from Beats by Dr. Dre, with Apple coming in at second place with 25 percent of the teen vote.
5. (Tie) Car – 8%
In all likelihood, teens with wheels of their own got their car from their parents, but even new cars require maintenance, gas, and new tires. Still, despite the hefty price tags associated with those costs, cars are pretty low down the list of things teens spend money on, suggesting that most are still catching rides with their parents while they can, or else relying on public transportation or alternate modes of transport to get from A to B.
In fact, there’s been a marked decrease in the number of cars purchased by millennials, suggesting that an ongoing cultural shift away from car culture is underway. An article on factcoexist.com goes into some of the numbers, pointing to a study by the AAA Foundation for traffic safety that shows car purchases by 18-30 year olds fell by about 30% from 2007-2011, and only 54% of people had a driver’s license by age 18.
4. Shoes – 8%
Shoes are something of a ridiculous expense, if only because they’re so ridiculously expensive. Alone, shoes account for between 25 and 30 percent of a teen’s wardrobe spending. The companies that are cleaning up, far and away, are Nike and Vans, with Vans being the number two choice of footwear brand for the vast majority of time between 2008 and 2014. Nike has been number one at least as far back as 2007.
Though the brands of shoes purchased most by teens tend not to be exorbitantly priced, the fact that most teens will go through several sizes of shoe within just a couple of years, combined with exclusive models and partnerships with popular entertainment properties, explain why shoes take up so much of a teen’s budget.
3. Accessories / Personal Care – 10%
Ah, overpriced body spray and ineffective acne treatments. It’s little wonder that personal care makes up so much of teen expense when virtually every ad for this category of product is advertised with a hyper-sexualized or self-esteem-lowering (or both!) campaign designed to shame or enthrall teens into picking up the product on offer.
This category also includes accessories, with handbags getting special mention in the study’s results. Expect to see a bunch of Michael Kors and Coach bags in the average high school, with those two brands taking the top spots for both average and affluent teens.
2. Clothing – 21%
Far outstripping everything below is clothing, with teens devoting more than a fifth of their leisure spending to peacocking it up with whatever the latest trend is for the 18 and under crowd. Nike, Forever 21, and brands associated with action sports – think Volcom, Hurley, O’Neill, etc – are the three top buys for teens, suggesting teens are interested in sportswear and lifestyle clothing that is fairly affordable, as well as clothing that helps suggest or establish some sort of identity.
“Athleisure” brands, as the study calls them, have this year overtaken traditional clothing styles for the first time ever. Clothing lines like Lululemon, Under Armour, and Nike are included in this category, while traditional or “Denim” brands include Levi’s, American Eagle, and True Religion.
1. Food – 21%
The most interesting finding of this survey, by far, is that teens are for the first time ever devoting enough money to food to make it one of their top expenses. It’s not just that kids today are much fatter than they used to be. Along with the obvious Starbucks expense are extra funds allocated to organic food and restaurants, suggesting teens are getting more choosy with how they spend on food.
Along those lines, the study reveals another first. Chipotle has passed Taco Bell as the Hispanic restaurant chain of choice. The company has received enormous amounts of publicity for its open concept kitchens and the presence of some relatively healthy options on its menu, while Taco Bell has become associated with unfortunate bouts of gastrointestinal unpleasantness.
Overall, the study has also found there is a greater culture of dining out than in previous years. Food spending jumped to 21 percent of teens’ budgets from 15-16 percent in 2012.
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