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
Seacrest was so astonished that he had to test the contestant's strength right then and there.
12 hours ago
Drew Carey is quite a sensation when it comes to performing viral dance trends.
13 hours ago
The guest initially expected her grandmother's painting to be worth a couple hundred dollars.
14 hours ago
The creators of the show apparently went too far with the joke but tried to make up for it too.
1 day ago
The TikTok creator claimed that the recalled products are widely used by low-income and middle-class families.
1 day ago
The star was stopped midway by his partner while fans loved the look.
1 day ago
Viewers couldn't believe what they saw and some even suggested it could be a prank.
1 day ago
Cuban offered the entrepreneur a "geek to geek" offer that he couldn't refuse.
1 day ago
Reports suggest that the anti-theft measures are causing hostility between shoppers and workers.
2 days ago
Seemed like inflation has been eating into the nuggets sold by Walmart under Great Value.
2 days ago
The entrepreneur shared that it was a habit of his to reward the people who worked hard for him.
3 days ago
Pointing at the shelf full of Great Value Orange Juice, the creator said that the brand is trying to fool people.
3 days ago
For the contestant named Linda, the deal was further sweetened as she got to meet a celebrity.
4 days ago
When it was her turn to play, Mama Doris went blank on the fifth answer costing her team.
4 days ago
She herself couldn't believe that she had come up with a solution that seemed impossible.
4 days ago
Carey called the aspiring actor a 'future star' while celebrating his win on the show.
4 days ago
Kimmel successfully bagged a multimillion dollar deal as well.
4 days ago
He got too close to the contestant but she played along while the audience laughed awkwardly.
5 days ago