×

Millennials might save Christmas by spending more

While the majority of Americans have a tight grip on their pocketbooks this holiday season, millennials are more likely to splurge.

Compared to older age groups, young people ages 18 to 29 are twice as likely to spend more this holiday season than last year, according to a report released Thursday by Bankrate.com. That's because millennials have the highest feelings of job and financial security, said Greg McBride, Bankrate.com chief financial analyst.

Ben Welsh | Age Fotostock | Getty Images

This is not because of young, misguided optimism. It's not a one-time anomaly either. Young people have skills that employers crave, they are paying down debt, increasing savings, and their net worth has been improving, McBride said.

"Higher level of confidence in their financial security translates into more discretionary spending that you don't see in other age groups that don't have similar level of confidence," McBride said.

Read More How millennials are shaking North Korea's regime

Twenty-eight percent of millennials say they will spend more—that sounds small but it's still double the percentage of Americans 30 years and older who plan to increase spending, at about 11 percent.

The majority of Americans and millennials plan to spend the same or less than last year. Reluctance to spend more "underscores prudence and inclination towards frugality that many Americans have many years after the recession," McBride said. Americans are not receiving pay raises, and those who have are struggling to keep up with increasing expenses.

"Most American consumers, despite improved feelings of financial security, don't have extra money to throw around—lower gas prices notwithstanding," McBride said. Americans fear that "benefits from lower gas prices, unlike pay raises, may be temporary."

Read More Housing gets more affordable: Why aren't millennials buying?