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How Do Americans Spend Their Money, By Generation?

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Consumer Spending by Generation

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Open the large interactive version here U.S. Spending by Age Group

Open the large interactive version here U.S. Spending by Age Group

How Americans Spend Their Money, By Generation

In 2021, the average American spent just over $60,000 a year. But where does all their money go? Unsurprisingly, spending habits vary wildly depending on age.

This graphic by Preethi Lodha uses data from the U.S. Bureau of Labor Statistics to show how average Americans spend their money, and how annual expenses vary across generations.

A Generational Breakdown of Overall Spending

Overall in 2021, Gen X (anyone born from 1965 to 1980) spent the most money of any U.S. generation, with an average annual expenditure of $83,357.

GenerationBirth Year RangeAverage Annual Expenditure (2021)
Silent1945 or earlier$44,683
Boomers1946 to 1964$62,203
Generation X1965 to 1980$83,357
Millennials1981 to 1996$69,061
Generation Z1997 or later$41,636

Gen X has been nicknamed the “sandwich generation” because many members of this age group are financially supporting both their aging parents as well as children of their own.

The second biggest spenders are Millennials with an average annual expenditure of $69,061. Just like Gen X, this generation’s top three spending categories are housing, healthcare, and personal insurance.

On the opposite end of the spectrum, members of Generation Z are the lowest spenders with an average of $41,636. per year. Their spending habits are expected to ramp up, especially considering that in 2022 the oldest Gen Zers are just 25 and still early in their careers.

Similarities Across Generations

While spending habits vary depending on the age group, there are some categories that remain fairly consistent across the board.

One of the most consistent spending categories is housing—it’s by the far the biggest expense for all age groups, accounting for more than 30% of total annual spending for every generation.

GenerationAverage Spend on Housing (2021)% of Total Spend
Silent (1945 or earlier)$16,65637.3%
Boomers (1946 to 1964)$21,27334.2%
Generation X (1965 to 1980)$26,38531.7%
Millennials (1981 to 1996)$24,05234.8%
Generation Z (1997 or later)$15,44937.1%

Another spending category that’s surprisingly consistent across every generation is entertainment. All generations spent more than 4% of their total expenditures on entertainment, but none dedicated more than 5.6%.

GenerationAverage Spend on Entertainment (2021)% of Total Spend
Silent (1945 or earlier)$2,0274.5%
Boomers (1946 to 1964)$3,4765.6%
Generation X (1965 to 1980)$4,6945.6%
Millennials (1981 to 1996)$3,4575.0%
Generation Z (1997 or later)$1,6934.1%

Gen Zers spent the least on entertainment, which could boil down to the types of entertainment this generation typically enjoys. For instance, a study found that 51% of respondents aged 13-19 watch videos on Instagram on a weekly basis, while only 15% watch cable TV.

Differences Across Generations

One category that varies the most between generations and relative needs is spending on healthcare.

As the table below shows, the Silent Generation spent an average of $7,053 on healthcare, or 15.8% of their total average spend. Comparatively, Gen Z only spent $1,354 on average, or 3.3% of their total average spend.

GenerationAverage Spend on Healthcare (2021)% of Total Spend
Silent (1945 or earlier)$7,05315.8%
Boomers (1946 to 1964)$6,59410.6%
Generation X (1965 to 1980)$5,5506.7%
Millennials (1981 to 1996)$4,0265.8%
Generation Z (1997 or later)$1,3543.3%

However, while the younger generations typically spend less on healthcare, they’re also less likely to be insured—so those who do get sick could be left with a hefty bill.

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Money

Charted: The Most Popular Investing Strategies, by Generation

Buy and hold remains the most popular investing strategy across generations, with Baby Boomers relying on this strategy the most.

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How Do Different Generations Invest Their Money?

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

When it comes to investing, each generation has their own mix of strategies, and younger generations like to try a bit of everything.

This graphic visualizes the breakdown of how each generation uses each of the following types of investing strategies:

  • Buy and hold: Investors purchase stocks or assets and keep them long-term, regardless of short-term market fluctuations
  • Growth investing: Investing in companies expected to grow at an above-average rate, even if their stock prices are higher
  • Fractional shares investing: Purchasing a portion of a full share, allowing investors to invest in expensive stocks with smaller amounts of money
  • Short-term trading: Buying and selling assets quickly, typically within days or weeks, to capitalize on short-term market movements
  • Direct indexing: A method where investors buy and own individual stocks of an index directly rather than through a mutual fund or ETF, allowing for greater customization and tax efficiency
  • Socially responsible investing: Investing in companies that meet specific ethical, environmental, or social criteria
  • Robo-advisor investing: An automated investment service that uses algorithms to manage and optimize an investor’s portfolio, typically with low fees
  • Thematic investing: A strategy centered on investing in companies tied to specific trends or themes, such as clean energy or technological innovation

The data is based on a Charles Schwab Modern Wealth survey of 1,000 U.S. adults, and is updated as of March 2024.

Buy and Hold Investing Most Popular Across Generations

Americans of all generations mostly rely on the buy and hold strategy, with boomers relying on this strategy the most (60%) and Gen X relying on it the least (48%).

Investing strategyGen Z (1997-2002)Millennials (1981-1996)Gen X (1965-1980)Boomers (1948-1964)
Buy and hold57%59%48%60%
Growth investing57%56%51%49%
Fractional shares investing48%48%33%25%
Short-term trading52%52%31%20%
Direct indexing44%42%26%23%
Socially responsible investing43%45%27%17%
Robo-advisor investing40%41%25%11%
Thematic investing41%41%20%9%

Across the board, younger generations tend to adopt a wider range of investing strategies than older generations. Specifically, Gen Z and Millennials tend to use newer investing strategies more often, including fractional shares investing (48% for both) and short-term trading (52% for both).

Both younger generations also use technology-driven strategies like robo-advisor investing much more than the older two generations.

Robo-advisors are online investing platforms that use algorithms to create and manage investment portfolios, like Betterment and Wealthsimple.

Younger generations are also increasingly turning to social media to inform their financial choices.

According to the Charles Schwab survey, 72% of Gen Z respondents considered financial advice from social media, compared to 57% of Millennials, 38% of Gen X, and only 19% of Boomers.

Gen Zs are also starting to invest earlier. On average, Gen Zs started investing at 19 years old, compared to 25 for Millennials, 32 for Gen X, and 35 for Boomers, according to Charles Schwab.

Investing earlier allows investors more time to grow their wealth, as compounding interest can significantly increase returns over the long term.

Learn More on the Voronoi App

To learn more about Americans’ investing patterns, check out this graphic that visualizes shows the percentage of financial assets allocated to corporate equities among U.S. households and non-profits.

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