ECONOMY & WORK
MONEY 101
NEWS
PERSONAL FINANCE
NET WORTH
About Us Contact Us Privacy Policy Terms of Use DMCA Opt-out of personalized ads
© Copyright 2023 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.
MARKETREALIST.COM / NEWS

Gen Z and Millennials Are Struggling But Baby Boomers Are Living It Up

Bank of America's internal data shows a "significant gap" in spending between the older and the younger generations.
UPDATED JAN 22, 2024
Cover Image Source: Getty Images | Garry Hogg
Cover Image Source: Getty Images | Garry Hogg

While younger Americans are living paycheck to paycheck, baby boomers are splurging like there's no tomorrow. The Bank of America's internal data shows a "significant gap" in spending between the older and the younger generations.

Baby boomers are ramping up their expenditure, whereas Gen X, Gen Z, and millenials are cutting back as they struggle with the high cost of living that includes housing costs and student loan debt repayments.

"It's fairly unusual," said David Tinsley, senior economist at the Bank of America Institute, told CNN.

The publication reported that the overall household expenditure dipped by 0.2% year on year and as per the bank's data card, the generational data showed a varied picture.



 

Older Americans are increasing their spending as they benefit from a spike in Social Security payments. Starting in January, the Social Security recipients got an 8.7% cost-of-living adjustment, the biggest increase since 1981. Bank of America spending shows a significant rise in spending by households that received the cost-of-living boost.

The bank also noticed that the surge is happening in high-income households, which are less likely to be affected by the spike in Social Security payments.

"That can’t be the whole story," Tinsley said. 

The Bank of America says that the older generation is spending on travel, including hotels, airfare, and also cruises, especially after the pandemic.

Pexels | Marcus Aurelius
Pexels | Marcus Aurelius

The younger Americans have student loan repayment looming over them after the return of the loan repayments was confirmed by the Biden administration. The bipartisan debt ceiling deal included the provision that restricted the extension of the pause on federal student loan repayments.

The suspension is expected to end by August. This is bad news, especially for the younger borrowers. Americans are currently sitting on $1.6 trillion of student debt and the vast majority of the borrowers are below the age of 49.

For millions of Americans, this return of the repayment means less money left to spend on entertainment and vacations.

Pexels | Marcus Aurelius
Pexels | Marcus Aurelius

One of the main reasons why this is happening is due to the sheer number of baby boomers in America. There are way more consumers over 60 than they were about a decade ago. 

The large post-war generation born between 1945 to 1964 has been the driving force behind the economy for over seven decades now. 

Here are some ways baby boomers are spending their money, as per Financial buzz

Housing still tops the list as baby boomers continue to take care of property taxes, repairs, and maintenance.

It isn't just on baby boomers' list as every generation loves to spend on food.

Fitness is a major priority for this generation. They work out especially to avoid any serious health conditions.

Vacations

Travel is a popular way of spending money and as they are mostly retired they can go on a vacation any time of the year.

Coffee

Americans love coffee and there's no reason why this generation should be any different. 

Gifts

This generation gifts a lot! They like to honor milestones like birthdays and graduations.

Electronics

Well, yes baby boomers are pretty decent at tech and they spend a significant amount of money in buying new gadgets.

Supplements

Like other areas of health, seniors do spend a lot on supplements and once they feel that the supplements work for them, they keep rebuying.

MORE ON MARKET REALIST
The coin carries a rare anomaly which makes it even more valuable for collectors.
5 hours ago
Some users did praise the woman for her ethical conduct and said that she would be rewarded one way or the other.
1 day ago
The tiny bag comes along with a microscope that has a digital display for the buyer to see their purchase.
1 day ago
The popular restaurant chain replaced the reward in chicken with a cash prize later on.
1 day ago
Several other consumers also admitted that the said changes were driving them away from Amazon.
2 days ago
The man's son even moved the money to a safe account to stop him from sending more funds to the scammer.
2 days ago
While the good Samaritan could only see the cash, a piece of paper turned out to be more valuable
2 days ago
The cards were collected by his father for an entire lifetime even as he moved from one city to another.
3 days ago
"That's quite a lot for a little box, isn't it?!" one of the guests exclaimed.
3 days ago
Sajak is also set to hit the stage by starring in a play in Hawaii Theatre after his stint on TV.
3 days ago
He made a whopping $195,000, doubling his life savings in under a minute.
4 days ago
A representative of the California State Lottery cited the large number of claims that they process as a reason.
4 days ago
The model of the TV appeared to be a rear projection Samsung HCL552W, which was sold in the US market in 2002.
5 days ago
The man wasn't convinced that he had actually won until he personally turned up to claim the prize.
5 days ago
Walmart introduced the new policy and restrictions after another retailer, Target, did the same.
5 days ago
The collection remained hidden for decades in the vault of a Philadelphia bank, unknown to collectors.
6 days ago
The guest finally sought help from the Reddit community and found some support as well as suggestions.
6 days ago
The user also highlighted the need for better tech at Costco to ensure that people can leave quickly.
6 days ago
The rapper later joked that Taco Bell would have to change its slogan to 'We messed with the bull and got the horns."
7 days ago
The marine pilot from Stafford took less than a second to win the game.
7 days ago