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 old painting turned out to be an early piece from the renowned artist David Hockney.
3 hours ago
The player aced the tricky game of 'Gas Money' and, needless to say, she celebrated in style.
6 hours ago
Fans were shocked to see how the player couldn't solve one of the easiest puzzles in the show's history.
7 hours ago
The company, Scholly, entered the Shark Tank Hall of Fame as it gave a 60x return years later.
8 hours ago
After the contestant, Drew Carey broke the board further while trying to fix it...
1 day ago
As it so turned out, a crucial ruling from the judges led to a BIG win for the player.
1 day ago
When a guest brought a precious Charles Rohlfs chair, expert John Sollo confessed that he was nervous to appraise it.
1 day ago
The guest had no idea about the item being a Tiffany product and being embedded with a rare gem.
2 days ago
The host was baffled by the goof up that the contestant made between two words.
2 days ago
Carey showed that he has got the weapon of sarcasm, and he isn't afraid to use it.
2 days ago
Whatever the host was expecting, it was far away from what the contestant said on national TV.
2 days ago
The guest was surprised to learn more about the item he had actually found on the street for free.
2 days ago
After going through everything on the board, the player left Harvey in hysterics with his answer.
3 days ago
As it so turned out, the weird-looking floor lamp was a piece from a very famous studio.
3 days ago
Most contestants were consistently getting the answers wrong, and Harvey was worried about what was next.
4 days ago
Some claimed that they got the puzzle despite English being their second language.
4 days ago
The letter was written to a columnist in response to a piece taking a swipe at Sinatra.
4 days ago
In a special episode of Celebrity Family Feud, a WWE star decided to go for the one thing Harvey is known for.
4 days ago
Luck was shining for her as she was off to a flying start and won the car with a single card.
4 days ago
Sajak had a witty reply for the contestant who was fanboying over White during the game.
7 days ago