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How Are Different Generations Spending Their Money?

Man and woman holding paper and smart phone at kitchen table


Infographic displaying generational spending differences

Each generation is subject to its own set of stereotypes, often bestowed upon them by other generations. Whether it’s something about spending too much money on avocado toast… spending too much time on your phone… or not knowing how to use your phone… stereotypes don’t necessarily reflect reality.

At Armed Forces Bank, we were most interested in learning how each generation is spending their money and how these habits differ across age groups. Here’s what we found out.

Defining Each Generation

Generation Z: Born 1997-2012

Millennials: Born 1981-1996

Generation X: Born 1965-1980

Baby Boomers: Born 1946-1964

Silent Generation: Born 1928-1945 (Pew Research Center)

Note: Some studies focus primarily on baby boomers, Generation X, and millennials when reporting spending statistics.

Annual Spending Habits

While Generation X is sometimes called the “forgotten generation,” businesses would do well not to forget about them. Gen X consumers spend more on average than any other generation on an annual basis.

Millennials spend an average of $52,874 annually. Baby boomers spend an average of $63,235 annually. But Gen Xers outspend them both, with an average annual expenditure of $72,683. This is 41% more than millennials and 18% more than baby boomers. (SmartAsset)

Average Housing Spending

While millennials currently make up the largest share of the population, only 17% of millennials own homes. Here’s the share of homeowners by generation:

  • Generation Z: 1%
  • Millennials: 17%
  • Generation X: 28%
  • Baby Boomers: 42%
  • Silent Generation: 12% (Zillow)

Of millennials who are homeowners, 33% of millennials spend more than a quarter of their income on mortgage payments. Only about 19% of Gen X homeowners and 15% of baby boomers spend that much of their income on housing. (Hometap)

Travel, Entertainment, and Leisure Spending

According to the stereotype, younger generations are seen as spending money on more frivolous purchases. (US News/Money) But how does that stack up to reality?

The truth is that millennials are more likely to value experiences and spending money on travel. They spend an average of $5,700 on travel, while baby boomers only spend $3,300. (Berkshire Hathaway Travel Protection)

However, when it comes to other types of entertainment, millennials are outspent by Generation X and baby boomers. Gen X consumers spend an average of $3,921 on entertainment, closely followed by baby boomers spending $3,801. Millennials are far behind, spending just $2,391 on entertainment. (SmartAsset)

Generic vs. Name Brand Spending

Many consumers may choose to purchase generic or store-brand products, rather than name brands, to save money at the store. How does that vary across different generations?

Millennials are more likely than Gen X or baby boomers to turn to generic products over name-brand products. More than 50% of millennials state they have “no real preference” for name brands vs. generic. This was only true for 39% of boomers. (Cadent Consulting Group)

For Gen X consumers, the choice between a name brand or generic product is more telling in certain product categories. For example, 67% of them prefer name-brand junk food, which could be a result of heavy TV advertising in the ‘80s and early 90’s -- Gen Xers’ formative years. (CSP Daily News) On the other hand, when it came to junk food, only 58% of boomers and 53% of millennials preferred the name brand products. (CSP Daily News)

Buying Used or Secondhand Items

It may not have always been “cool” to shop at thrift stores, but the younger generations are leading the way as the population increasingly turns toward secondhand stores and apps for their shopping needs. And, of course, those in military families know how useful thrift stores can be.

Millennials and Gen Z shoppers are buying secondhand items 250% faster than other generations, and 50% of all millennial and Gen Z respondents said they would rather own fewer, high-end designer brand items than more inexpensive, mass-produced clothing. (Mercari)

Here’s the share of consumers who said they shop secondhand by generation:

  • Generation Z: 85%, up from 59% two years ago (44% increase)
  • Millennials: 85%, up from 64% two years ago (33% increase)
  • Generation X: 85%, up from 63% two years ago (35% increase)
  • Baby Boomers: 81%, up from 52% two years ago (66% increase) (First Insight)

No Matter Your Generation or Spending Habits, Armed Forces Bank is Here

At Armed Forces Bank, we’re proud to serve those who serve -- people from all walks of life, living all around the country and the world. We work hard to offer a variety of products and services to help each and every client work toward their financial goals.


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