Baby Boomers to Gen Z: How They Spend, Save and Plan

Consumer economic behaviors evolve with each passing generation. Personal values, technological advances, and economic environments shape these patterns.

Their remarkable shifts in spending and saving show the changing nature of consumer finance, starting from its economic influence.

As Baby Boomers head into retirement, Gen Xers are in their prime earning years, dealing with financial responsibilities. Meanwhile, millennials and Gen Z face the ups and downs of living in a fast-paced digital world.

Looking at how each generation manages their money, we analyze their different approaches, from saving to spending and planning for the future.

Baby Boomers: A Bridging Generation

Born just after World War II, the Baby Boomer generation has a memorable role in the history of consumer behavior. As they near or embrace retirement, their spending and saving habits reflect a lifetime of economic participation defined by a mix of tradition and adaptation.

Since they’ve embraced many modern-age conveniences and innovations, baby boomers still prefer value and longevity in their buys. This generation tends to choose quality over quantity, investing in goods that promise durability and reliability.

Their consumption is less impulsive, but they are notable spenders. According to the Bank of America, boomers and the Traditionalist generation comprise 40% of total consumer spending.

Their sense of identity has significant implications for their financial decisions. Boomers are open to indulging in the modern conveniences and luxuries that their economic stability can afford.

Their spending patterns show an increased focus on healthcare, leisure, and home planning compared to other generations. They seek products and services to guarantee a secure and comfortable retirement, often placing a premium on health and wellness.

Generation X: Economic Stability and Digital Emergence

Generation X often needs more spotlight than its predecessors and successors. This group, born after the baby boomers and before the millennials, has formed its own buying and money management identity.

This generation was the first to adopt new technology in everyday life quickly; unlike boomers, who had a more challenging time, millennials and Gen Z were raised in a digital environment.

When it comes to spending, Generation X shows a measured approach. Selective about their investments in technology and media, this group often seeks a balance between cost and utility.

They have experienced the transition from analog to digital, which has significantly influenced their spending habits and media consumption.

Gen Xers use new platforms but tend to pick just a few services worth the cost and matching their interests.

Despite their measured financial approach, Generation X faces an imminent retirement crisis. According to a recent report by the National Institute on Retirement Security, only 14% of Gen Xers in the US have a pension plan.

This lack of retirement funds indicates the bottom half of this generation needs more financial resources to keep up their post-employment living.

Millennials: Thrifty, Tech-Savvy, and Socially Aware

Millennials, born from the early ‘80s to the mid-90s, have caught people’s eye in marketing and economics.

They’re changing what it means to be a savvy shopper by focusing more on buying things that save money and are suitable for society. This mature generation is starting to spend in ways prioritizing cost-effectiveness and ethical considerations.

A 2020 Consumer Culture Report reveals they are the most impulsive buyers of all generations. However, millennials aim to maximize the value of their spending, looking for ways to make their money go further.

They still enjoy shopping in stores even though they like using technology to find sales. Often, they look up products online but buy them in person to get a feel for what they’re buying when it’s essential.

Known for their smart spending and embracing technology, the group now faces a significant challenge in buying or renting a property.

A 2023 report from Consumer Affairs shows the median home price has jumped to $370,600, almost twice as much as in the ‘70s after adjusting for inflation. Rental costs surged by 150% compared to the same decade.

Essential expenses like a house, a college degree, and healthcare have all seen prices climb much faster than paychecks.

Relative to baby boomers, millennials have to stretch their budgets to cover the basics.

Generation Z: Redefining Consumer Habits

Born from 1995 onwards, Generation Z is significantly impacting today’s market. We’re seeing a new group of consumers familiar with rapid tech changes and worldwide connections.

Also known as the mobile generation, they embraced technology way beyond Generation X or millennials ever did. Smartphones, tablets, and other smart devices are integral to their social lives.

This deep integration of tech has transformed their approach to consumption, collapsing traditional notions of time and space when it comes to shopping.

Social media advertising has a strong impact, frequently prompting immediate buying actions. Platforms like Instagram and TikTok act as online shopping spaces for this generation, delivering tailored suggestions and the convenience of shopping anywhere, anytime.

Still, the story doesn’t end online. The 5WPR’s 2024 Consumer Culture Report confirms nearly half of Gen Z shoppers are also keen on visiting physical stores. This trend proves they are still exploring and actively testing the balance between online shopping and in-store visit experiences.

But having everything at their fingertips doesn’t stop them from saving more money than other generations. A Bloomberg report reveals they save approximately a third of their income on average, and 25% own stocks.

The Ever-Changing Nature of Consumer Markets

Each generation shapes the market in its own way—baby boomers with cautious investments, Generation X with a sensible balance, millennials with conscious consumption, and Generation Z with their tech-savvy lifestyle.

Learning these varied trends in spending and saving is crucial for those aiming to keep pace with the dynamic consumer market. Businesses must adapt to succeed and be able to sort out these evolving behaviors.

Author: Caitriona Maria

Title: Freelance Writer

Expertise: Education, teaching language, online learning, travel


Caitriona Maria is an education writer and founder of TPR Teaching, crafting inspiring pieces that promote the importance of developing new skills. For 7 years, she has been committed to providing students with the best learning opportunities possible, both domestically and abroad. Dedicated to unlocking students' potential, Caitriona has taught English in several countries and continues to explore new cultures through her travels.