The way people define success and happiness has shifted dramatically in the past few decades. For Millennials and Gen Z, owning a house, a car, or even designer goods no longer holds the same appeal as it did for previous generations. Instead, these younger cohorts are placing greater value on experiences—traveling, attending events, and pursuing hobbies. This trend has profound implications for the economy, businesses, and even personal finance strategies.
This article explores why Millennials and Gen Z are favoring experiences over ownership, supported by data and insights, and examines how this shift is reshaping spending habits and financial priorities.
The Rise of an Experience-Driven Mindset
Millennials and Gen Z grew up in a world shaped by technology, social media, and economic uncertainty. These factors have collectively influenced their preferences, making them value the intangible over the tangible.
A 2023 report by Eventbrite found that 78% of Millennials and 68% of Gen Z prefer spending their money on experiences rather than material goods. Travel, dining, concerts, and wellness retreats have become the focal points of their spending habits. This preference is not just about the momentary joy of the experience but also about the memories, social connections, and personal growth that come with it.
The Economic and Cultural Factors at Play
Economic Constraints
For many young people, traditional markers of success like homeownership are increasingly out of reach. Rising property prices have made homeownership unattainable for many Millennials and Gen Z, particularly in urban areas. In 2024, the average home price in the U.S. hit $ 416,100, according to the National Association of Realtors. In Europe, the situation is similar, with major cities like London and Paris experiencing year-on-year property price growth of 7–10%.
With ownership out of reach, younger generations have shifted their focus to experiences, which are seen as more attainable and rewarding.
Cultural Shifts
Social media has played a major role in driving an experience-focused culture. Platforms like Instagram and TikTok amplify the appeal of travel, events, and unique experiences, as users share highlights of their lives with followers. For Millennials and Gen Z, these shared experiences not only bring personal joy but also contribute to their online identity.
Additionally, the rise of minimalism and environmental awareness has led to a rejection of excessive consumption. Owning less aligns with their values of sustainability and mindfulness, further reinforcing the trend toward experiences.
Spending Habits of Millennials and Gen Z
Data supports this generational shift in priorities. According to a 2023 report by McKinsey, Millennials allocate 55% of their discretionary income to experiences, compared to 35% for Gen X and Baby Boomers. Similarly, Gen Z spends approximately 45% of their discretionary income on travel, dining out, and entertainment.
The gig economy also enables this lifestyle. With platforms like Airbnb and Uber, younger people can access services on demand without committing to ownership. For instance, car ownership among 20- to 34-year-olds in the U.S. declined by 25% from 2000 to 2020, as reported by the Federal Highway Administration.
The Long-Term Implications of Prioritizing Experiences
This generational shift isn’t without its challenges. While experiences enrich lives, they don’t build tangible wealth. For younger generations, balancing their desire for experiences with long-term financial security is a delicate act.
The rising popularity of “buy now, pay later” services like Klarna and Afterpay also poses risks. These services allow users to spread payments for experiences, such as vacations, over time. While convenient, they can lead to mounting debt if not managed carefully.
On the flip side, prioritizing experiences fosters stronger relationships and emotional well-being. Research published in the Journal of Positive Psychology shows that experiences contribute more to happiness than material possessions, as they are more likely to enhance social connections and create lasting memories.
Redefining Success for a New Generation
For Millennials and Gen Z, success is no longer defined by what they own but by how they live. Experiences provide a sense of fulfillment that material goods often fail to deliver. However, the key is finding a balance between living for today and preparing for tomorrow.
By adopting smart financial habits—such as budgeting for experiences, avoiding unnecessary debt, and investing for the future—young people can embrace this experiential lifestyle without sacrificing long-term security. Success, for this generation, isn’t about accumulation—it’s about creating a life rich in meaning and connection.
The experience economy is here to stay, and it’s redefining what it means to live a fulfilling life.
