Spending Habits by Generation in 2026

Despite current economic concerns and worries about inflation, U.S. consumers continue to spend money, according to the most recent official spending data. The typical household spent $78,535 in 2024, according to the Bureau of Labor Statistics (BLS), with Gen X spending the most at $96,941.

Rising costs contribute to some of the spending, but everyday habits and shifting consumer attitudes and behaviors can also impact the numbers. Analyzing spending habits by generation can shed light on which age groups have the largest budgets, and where their money goes. Read on to find out how each generation feels about spending — and what they are spending their hard-earned dollars on in 2026.

The 2026 Consumer Landscape: A New Reality for Spending

Many of the same factors that influenced U.S. consumer spending trends in 2025 continue to impact the way the average American manages money in 2026. For example, inflation rose from 2.4% in May of 2025 to 4.2% in May 2026.

How Inflation Impacts Discretionary vs Essential Costs

Is consumer spending down? It may be declining for discretionary spending in 2026. Discretionary costs are the “wants” in a budget, while essential expenses are the “needs.” Inflation is reshaping household budgets and for many Americans, that means cutting back on the wants.

Inflation marks a rise in the cost of goods and services. When prices go up, consumers may need to direct more of their after-tax income to essential costs, such as housing, transportation, and food. When their spending on essential expenses increases, their discretionary spending can be reduced if they have less money left over each month for things like entertainment, dining out, or travel. A survey of 24,000 consumers conducted by global e-commerce platform ESW found that 39% of Americans say they’re spending less on discretionary expenses now than they were a year ago.

Food, energy, and gas saw the biggest price jumps between May 2025 and May 2026, according to the Consumer Price Index (CPI), which tracks price data in the U.S. Housing, another expense category, remained relatively stable over that same period.

Global forecasts suggest that inflation is likely to remain at or near its current level for most of 2026, which may put continued pressure on consumers from all generations to reconsider their discretionary spending habits as they try to beat inflation.

Recommended: Monthly Income Calculator

The Shift Toward Budget-First Consumer Behavior

Budget-first spending habits emphasize intentionality and strategic decision-making. When you go to a grocery store, for example, you may have a set dollar amount for your grocery budget. Anything that would put you over budget doesn’t get purchased.

Budgeting appears to be a growing trend. Fifty-three percent of Americans set a spending plan for 2026, compared to 46% who did so in 2025, according to data from YouGov. Among adults who keep a budget, 66% say they do so to ensure they have enough money in their bank account each month to cover food, rent, and bills.

Increased interest in budgeting and mindful spending suggests that more households are rethinking how they allocate their income each month. The YouGov research showed that younger generations, specifically those aged 18 to 34, are more likely to feel optimistic about their financial outlook compared to Millennials, Gen X, and Baby Boomers.

Gen Z Spending Habits: The Rise of “Affordable Affluence”

Gen Z spending habits are an example of “less is more” in action. According to BLS data, young adults born in 1997 or later are the second-lowest spenders generationally, trailing only behind the Silent Generation (the group born in 1928 to 1945). In 2024, the typical Gen Zer spent $54,830 annually. At the same time, they’re chasing after “affordable affluence” or luxury on a budget, and taking the “treat yourself” mantra seriously.

Why “Little Treats” and Emotional Spending Are Trending

While emotional buying is not unique to any single generation, it is notable right now in the spending habits of many Gen Zers. While budgeting and managing spending are important to this group, 57% of Gen Z drop some of their money on “little treats” each week, according to a Bank of America survey. This leads to overspending for 59% of them.

Why is Gen Z splurging on little extras? The survey found that this group uses treats to help turn around a bad day or as a way to celebrate a small win. Many Gen Zers also tend to feel a sense of pessimism about achieving traditional financial milestones, such as buying a house. In a world that seems to feel increasingly unaffordable for younger generations, little treats may represent a small bright spot.

The Popularity of “Dupes” and Second-Hand Marketplaces

Some of the ways Gen Z attains affordable affluence include buying dupes (aka duplicates) of brand-name items and scouring second-hand shopping venues. For example, while 59% of Gen Z spenders say they prefer name brands, 41% said they’d be willing to buy private-label alternatives if the cost was lower, according to PwC research.

When they’re ready to make a purchase, Gen Z considers all the options, including resale and secondhand versus buying new. According to ThredUp’s 2026 Resale Report, 62% of Gen Zers reported shopping secondhand in 2025, with their buying focus shifting away from bringing in big “hauls” to seeking out “holy grail” finds. Fifty-eight percent say they automatically check resale first when shopping for clothes and accessories, with 45% doing so to find higher-end brands for less.

Gen Z spending habits generally illustrate a willingness to adapt where they shop in order to find what they want for less. At the same time, they’re using small “treats” like daily donuts or coffee as a form of self-care.

Millennial Spending Habits: Balancing Growth With High Living Costs

Millennials spent $85,302 on average in 2024, according to BLS data. Of that amount, $18,467 went to housing, second only to Gen X for the highest spending level. Millennials also rank second for food spending, at $11,345 on average. Perhaps it’s not surprising that this group is accustomed to spending, considering that they came of age in a period of increasing costs paired with slow wage growth.

The “Sandwich Generation” and Modern Family Financial Pressures

The “sandwich generation” refers to adults who split their time and financial resources between raising children and caring for aging parents. Americans in their 40s, which includes some of the oldest Millennials, are most likely to fit this description. More than half in this group, 54%, have at least one living parent aged 65 or older and one child under 18 or an adult child they help financially.

Those competing pressures, along with the need to save for their own eventual retirement and pay down student loan debt, make it challenging for Millennials to get ahead, spending habits aside. When you look at retirement savings by age, for example, the typical Millennial has $91,281 saved on average. They’re also carrying an average debt of $132,280, the second-highest of any generation.

Since 2020, Millennials and other generations have seen inflation rise by 25.1%. They experienced job market havoc following the 2008 financial crisis, and the economic disruption created by the COVID-19 pandemic.

Experience-Based Spending vs Long-Term Asset Accumulation

When Millennials spend money, they may often spend on experiences rather than material goods. An early study of Millennial spending habits found that 72% said they’d rather spend money on experiences instead of physical things, marking a shift away from materialism.

This attitude can be attributed, at least in part, to FOMO or fear of missing out. This phenomenon is the modern-day equivalent of keeping up with the Joneses, and it’s fueled largely by social media. While half of Americans admit to experiencing FOMO, certain generations are more susceptible. Fifty-seven percent of both Millennials and Gen X say FOMO drives their spending, while 69% of Gen Z agrees.

FOMO-driven spending habits can lead to lasting memories, but they could also be an obstacle to growing wealth. Millennial net worth averages $750,578; however, the median, which more closely reflects the typical Millennial’s assets, is $68,698.

Gen X Spending Habits: The Influence of the “Power Spender”

Compared to all other generations, Gen X spends the most money, at $96,941. This group, aged 46 to 61, spends more on housing, food, utilities, clothing, furniture, and transportation than any other age group. They also earn the highest incomes, at $140,313 on average. Age-wise, Gen Xers are in their peak earning years which, along with their various financial responsibilities, like college education for their children and caring for aging parents, helps explain why they’re big spenders.

Why Gen X Leads in Total Household Consumption

Gen X drove $15.2 trillion in spending in 2025 and that figure is expected to grow to $23 trillion by 2035. Part of that spending can be attributed to the fact that Gen Xers simply have more income on average. Another component is the fact that they, like Millennials, are also pulling double duty as carers for children and parents.

What’s different with regard to this sandwich generation is what they spend money on. While Millennials may still be covering secondary school expenses or daycare for younger children, Gen X parents may be trying to work out where college tuition fits into their budget. Their parents, meanwhile, may require a greater level of care, either in their home or a nursing facility, which adds to Gen Xers’ spending.

Changing Priorities: Health Care, Wellness, and Home Stability

Quality of life is a significant driver of Gen X spending habits. Health and wellness are priorities, as are home maintenance and comfort. Through the early 2030s, Gen X is expected to lead other generations when spending on health care and education, following a pattern set by Baby Boomers (aged 62 to 80).

Gen X already spends the most on home repairs and maintenance, at $3,728; when it comes to health care, they spend less than older generations. Boomers spend $7,496 per year on healthcare while the Silent Generation spends $8,001 on average, compared to Gen X’s $6,531. As Gen X ages, however, the health and wellness segment of their budgets may increase.

Purchasing Power by Generation: Who Holds the Wealth?

An estimated $124 trillion in wealth is expected to change hands through 2048 as the oldest Americans pass on their assets to younger generations. That could present opportunities for Gen X, Millennials, and Gen Z to improve their financial situations. It may also mean an economic boom if those who inherit money choose to increase their spending.

The Impact of the Great Wealth Transfer on Young Consumers

Younger Americans who benefit from the coming wealth transfer may find it easier to fund important financial goals like buying a home and saving for retirement. The number of first-time buyers in the housing market fell to 21% in 2025, with the median age of first-time buyers climbing to 40. Inherited wealth might drive a significant demographic shift in the market.

What else might Millennials and Gen Z spend money on? Some may invest part of it in the market, save for retirement, or aggressively pay down debt; others may choose to share some of their newfound wealth, or start businesses. And many may use their inheritance to maintain their desired day-to-day lifestyle. While it’s difficult to predict exactly how the movement of trillions of dollars across generations will affect spending, the Great Wealth Transfer is expected to reshape individual industries and the economy as a whole.

Debt-to-Savings Ratios Across Different Life Stages

Debt can be a roadblock to saving if a sizable chunk of an individual’s income goes to repaying credit cards, student loans, and other debts every month. To see how each age group compares, here’s a breakdown of the average debt and average savings for the different generations.

Generation	Average Debt	Average Savings
Generation Z	$34,328	$20,540
Millennials	$132,280	$41,540
Generation X	$158,105	$71,130
Baby Boomers	$92,619	$72,520

The data reflects some of the key points about generational spending habits, and where wealth-building fits into the picture. Gen X has the most income but is also the most debt-burdened, while Gen Z has the least money in the bank but has less debt to repay.

How AI and Predictive Analytics Personalize the Shopping Journey

Artificial intelligence is putting a new spin on the way people shop across generations. Agentic AI, for example, takes some of the stress out of comparing products from one retailer to the next by doing the heavy lifting.

Here’s how it works: You tell an AI agent what you want to buy and the maximum price you’re comfortable paying, and the AI presents you with a curated list of options. If you spot one you’re happy with, you can direct your AI agent to approve the purchase on your behalf. Some companies are also using agentic AI to make the return process smooth and seamless for buyers, and/or handle customer service requests.

Gen Z and Millennials are typically more likely to encounter AI agents while shopping compared to other generations; 48% of adults in those groups said online shopping is their preferred way to shop. As this technology continues to evolve, agentic AI may become more common in the typical shopper’s online experience across generations.

Online Banking Tools to Track Spending and Saving

For those in any generation who would like to set up a budget and keep a closer eye on spending while working toward saving for their goals, online banking tools may be helpful. A few options to consider include:

A 50/30/20 budget calculator can help estimate how much of your take-home pay you can save each month.

Mobile banking apps allow you to track your money. You can view essential expenses and discretionary spending side by side, to learn which expense categories make up the largest share of your budget.

By setting up savings vaults in a bank account, individuals can direct savings toward specific financial goals.

Saving spare change automatically whenever you spend is possible with tools like SoFi Roundups. All that spare change could add up over time.

Finally, individuals should make sure they have the right bank account for their needs. When comparing different accounts and banks, it’s important to consider the monthly fees, deposit minimums, withdrawal limits, and any added benefits, like early paycheck access with direct deposit.

For those who already have a personal account they’re happy with, they may want to think about whether it would make sense to open a joint bank account with their spouse or partner for saving or paying for their household expenses together.

The Takeaway

Differences in generational spending habits reflect each age group’s life stage, goals, and challenges, as well as their financial values and priorities. Understanding how other generations spend — and what motivates spending in your own generation — may help you figure out how your personal budget, spending habits, and assets compare. The more tuned in you are to how you spend, the easier it may become to make the most of every dollar.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

Better banking is here with SoFi, named the #1 Bank in the U.S. for the fourth year in a row by Forbes (2026).* Enjoy up to 3.10% APY on SoFi Checking and Savings.

FAQs

Which generation currently has the highest annual spending in the U.S.?

As of 2026, Gen X has the highest annual spending in the U.S. Members of Gen X spend $96,941 on average annually, and they lead spending in almost every category except for health care. Only the older generations — Baby Boomers and the Silent Generation — spend more on health care.

Why is Gen Z spending more on “little treats” despite economic stress?

Many Gen Zers spend money on little treats for themselves as a form of self-care or as a way to cope with economic stress and a negative view of the world. For this generation, rising prices can make certain life achievements, like buying a house, feel unattainable. So Gen Zers spend small amounts on little luxuries like coffee or a skincare product to reward themselves and boost their mood in an affordable way.

How has inflation changed Millennial spending habits in 2026?

Inflation has led Millennials and other generations to curb spending on non-essentials. As housing, utility, food, and fuel costs increase, adults in their 30s and 40s are adjusting their spending accordingly to dedicate more of their budget to necessary expenses. Discretionary spending, like travel, entertainment, and restaurant dining, is on the decline for some Millennials.

What are the main differences between Gen X and Gen Z shopping behaviors?

Gen Z is more likely to shop online compared to Gen X, who tend to both visit stores and shop online to make a purchase. With Gen Z, the focus is often on affordable luxury, and they achieve that goal by shopping secondhand or buying dupes of their favorite products. Gen X shopping is research-driven and more brand-loyal.

Is overall consumer spending expected to decline this year?

No, overall consumer spending is not expected to decline this year. In fact, retail sales are projected to rise. However, consumer attitudes and behavior are changing. Consumer confidence is on the decline, with only 35% of Americans expressing optimism about the economy as of May 2026. Consumers say they anticipate spending 40 to 50% less on discretionary items like travel, electronics, beauty products, and takeout food in the later part of the year. But they still expect to spend on core purchases, such as groceries and household goods, according to May 2026 research from McKinsey.

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