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 Academy 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.
How We Defined 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.
Average Annual Spending Habits
Generation X is sometimes called the “forgotten generation.” But businesses would do well not to forget about them: Annually, Gen X consumers spend more on average than any other generation.
- Millennials spend an average of $52,874 annually, and baby boomers spend an average of $63,235 annually.
- Gen Xers outspend them both, with an average annual expenditure of $72,683 -- 41% more than millennials and 18% more than baby boomers. (SmartAsset)
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)
Spending “Fun” Money
Younger generations are sometimes seen as spending money on more frivolous purchases. (US News/Money) But how does that stereotype stack up to reality?
- Millennials are more likely to value experiences and spending money on travel. They spend an average of $5,700 on travel, compared to $3,300 for baby boomers. (Berkshire Hathaway Travel Protection)
- 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
Buying generic or store-brand products, rather than name brands, is a tool many consumers use to save money at the store. Here’s how likely each generation is to buy generic.
- Millennials are more likely than Gen X or baby boomers to turn to generic products over name-brand products, with more than 50% of millennials stating they have “no real preference.” 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. 67% of them prefer name-brand junk food, for example, which could be a result of heavy TV advertising in the ‘80s and early 90’s -- Gen Xers’ formative years. (CSP Daily News)
- Only 58% of boomers and 53% of millennials preferred the name brand products in the same category. (CSP Daily News)
Buying 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 as a whole increasingly turns toward secondhand stores and apps for their shopping needs.
- 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, Academy Bank Is Here
At Academy Bank, we’re proud to serve many different types of clients and help with their individual needs. We are here to help you work toward your financial goals.