Consumer Spending by Generation
Crafting an effective marketing strategy that speaks to your buyers requires understanding key consumers’ spending habits, including how much the average person spends per year. More specifically, knowing how much your target audience spends can help you decide where, what, and how to market your products for better reach.
Here’s a look at consumer spending by generation in the United States.
Consumer spending by generation: Generation X
According to a recent study looking at consumer spending by generation, Generation X spends the most amount of money per year.
The study defines Gen X as people born between 1965 and 1980. With an annual expenditure of $91,382, it is the only age group whose spending exceeds $80,000. Experts say this is because many consumers in this age group have more financial responsibilities, as they’re often supporting not only their own children, but also their parents.
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The data on consumer spending by generation shows the largest share of their annual expenditure goes to housing. At $28,536, it’s 31.2% of Gen X’s total annual spend. This is followed by transportation, at $16,236 (17.8%), and personal insurance and pensions, at $13,001 (14.2%). In other words, more than 60% of Gen X’s yearly spending is on these three categories.
Consumer spending by generation: millennials and boomers
The age group with the second-largest annual expenditure is millennials. Defined by the study as consumers born from 1981 to 1996, they spend $$74,782 every year. Like Generation X, their largest expenditures are on housing ($26,241), transportation ($13,128), and personal insurance and pensions ($10,402 ). If these buyers are among your ecommerce business’s target group, knowing other key millennials’ online shopping statistics can come in extremely handy.
After millennials, boomers have the third-highest annual expenditure of $66,362—$25,020 lower than that of Generation X. Their three largest expenditures are:
- Housing: $21,962
- Transportation: $10,595
- Food: $8,729
Consumer spending by generation: silent and Generation Z
The silent generation (defined as those born in 1945 or earlier) and Generation Z (those born in 1997 or later) have the lowest annual expenditures, at $44,683 and $41,636, respectively.
The silent generation’s top three expenditures are:
- Housing: $18,792
- Health care: $7,250
- Transportation: $5,828
Generation Z’s top three expenditures are:
- Housing: $17,279
- Transportation: $9,731
- Food: $5,982