How Different Generations Are Spending Their Money

While it’s a mistake to pigeonhole individuals, researchers generally define generations by the years in which they were born. When we consider how different generations are spending their money, it’s reasonable to consider that people do select products and even make major purchases like cars, based on their stage in life and financial condition.

The Greatest Generation: born 1901-1924, they endured the Great Depression and served in World War II. Those who remain are well into their 90s. They value hard work and sacrifice, and they’re concerned with leaving a financial legacy for future generations.

The Silent Generation: Many from the Silent generation also served in World War II. Born 1925-1942, their nickname comes from a strong tendency toward caution and conventionality. Raised during the depression, the Silent Generation is frugal, disciplined, and values hard work and sacrifice. They keep a low profile and avoid “rocking the boat” to preserve and protect what they worked so hard to earn.

Baby Boomers: This generation has dominated culture for decades. Named for the surging post-World War II birth rate, scholars have argued that Boomers comprise two different groups: those born 1946-1954 and those born 1955-1965. The latter group, dubbed “Generation Jones” by author Jonathan Pontell in a book of the same title, derives its name from the slang term “Jonesing,” meaning yearning for something they missed out on—in their case, the idealism of the ‘60s. Characterized by dreams deferred because of economic recessions and tight job markets, this group became known as driven, competitive, and possessing a strong sense of irony. Both segments of the Boomer generation spend more on healthcare and save less than they should for retirement. They have significant credit card debt, possibly because they’ve had more time to accumulate it or because declining job opportunities cause them to rely more on credit.

Generation X: Born 1965-1979, many X’ers grew up as latchkey children of divorced parents. They didn’t experience any of the ‘60s idealism but reached maturity during the AIDS epidemic. Popular culture has depicted them as harboring an underlying sense of insecurity and ennui. They have higher incomes and spend more, but they also save a greater percentage of their after-tax income.

Millennials: Millennials are the much-maligned generation that gave us avocado toast and living in their parents’ basement. Born 1980-1994, their advanced education has saddled them with extensive student debt. They have a lower rate of homeownership than Boomers or X’ers. They experienced 9/11 in their most formative years, and they’re the first generation to grow up with the Internet. Millennials spend more percentagewise on housing, transportation, and food (including fast food and restaurants) than either Boomers or Gen X.

Generation Z: born after 2000, Gen Z is just coming into view as a cultural and consumer group. They are the first generation constantly connected through social media and mobile devices.

When it comes to how they spend money, the different generations show some general similarities within themselves, but overgeneralizing would deny the individuality of people in every generation.