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Which Generation Spends the Most Money?

Money with different generations

As you pay your bills each month and calculate how much money you have left for other expenses, you might wonder how your spending habits stack up to the average consumer. Are you spending more money on housing or food than others? Are you saving as much money as experts say you should?

To get a better idea of how your spending compares with others, it helps to break those ‘other’ consumers into categories for a more apt comparison. One of the best ways to categorize people in terms of their spending is by generation. After all, we spend money differently during specific times of our lives. For instance, people in their 20s tend to spend more on education than people in their 60s, while people spend more on healthcare as they get older.

So, which generation spends the most money? Let’s take a look at four generations and their spending habits in major areas like housing, food, and transportation. We’ll focus more on percentages of post-tax income spent to account for differences in average income by generation. That way, we can get a good idea of what demographic spends the most money and what they spend it on.

It also helps to know which generation has the most disposable income. People who have to spend more on housing and transportation will likely have less left over for discretionary spending.

Baby Boomers

To define this generation, baby boomers were born between 1946 and 1964 during the post-World War II years. Baby boomers have on average just under $70,000 in post-tax household income to spend each year.

Boomers are more likely to own a home than millennials but spend a smaller percentage of their expenses on housing than millennials or Generation Xers. That is likely due to lower housing prices when their homes were purchased and more members of the generation having their homes paid off.

Baby boomers pay a higher percentage of their income toward health care and entertainment than other generations. Perhaps surprisingly, boomers do like to shop online, as people over 50 years old spend over $7 billion online each year.

Generation X

Members of Generation X were born between 1965 and 1980. As a group, they have the highest average post-tax yearly household income at almost $90,000. That makes this group the generation that spends the most money overall. Where does that money go?

Gen Xers spend more on just about everything with their higher incomes. In terms of percentage of income, they spend more on personal insurance and pensions than any other generation. They spend a smaller percentage of their income on transportation than boomers or millennials. Generation X is also comfortable shopping online and at a store.


People born between 1981 and 1996 qualify as millennials. This generation has less post-tax income than boomers and members of Generation X with under $60,000 to work with. However, millennials tend to be burdened with higher costs for necessities.

In some categories, millennials are the answer to which generation spends the most money. As a percentage of their income, they spend more on housing, transportation, and food than the two generations that came before them. This leaves less for discretionary spending for millennials on average.

It also leaves less for them to spend on things like healthcare than boomers and Xers. Also, despite the fact that they spend a higher percentage of their income on housing, millennials are less likely to own their home than the two older generations.

Generation Z

Members of Generation Z were born after 1996 and are under 25 years old. Their spending habits differ from other generations in ways that are telling of their age. They spend more on retail, food, and entertainment than others.

Generation Z actually prefers shopping in stores more than millennials and Generation Xers. They tend to prefer the social aspect of in-store shopping as well as the instant gratification of immediately taking home their purchases.

How Do You Measure Up?

Comparing your spending habits with other members of your generation can help you see where your priorities are in relation to others in a similar time of life. You can also compare yourself with the generation older than you to get an idea of how your spending habits might change. Spending power by generation varies and will influence how each generation tends to spend its money.

According to experts, one thing that all four of the generations discussed here need to improve is their savings. Financial advisors recommend saving 20% of post-tax income. Generation Xers have the highest savings rate at just 16% of their income. That leaves room for improvement for everyone.

Understanding the dynamics of generations and money helps us get an idea of how we spend and how that measures up to others. What’s the next step? Talk with a financial advisor to see how you can achieve your goals.

If you need access to money to help you in the short-term, look into a fair loan. No matter which generation you belong to, Power Finance Texas can help you get a consumer-friendly short-term loan.