Millennials, Gen Z & Gen X: Who’s Spending More Where?
Written by
Emily Fowler
Edited by
Angela Corry
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As prices rise, so does the pressure to spend–but which generation is getting the biggest hit to their wallets? According to a recent Capital One Shopping study, millennials dominate in total spending but are deliberate about where their dollars go. Gen Z shops more often but with smaller budgets. Gen X? They’re the big spenders on life’s big-ticket items.
The breakdown across these three groups shows not just who spends the most, but also where the money goes.
Millennials Lead the Pack, But Not by Much
Millennials (born 1981-1996) are spending big. In fact, they account for a whopping $1.928 trillion of retail spending annually or roughly 26.8% of all U.S. retail spending. On average, a millennial spends $27,710 per year on retail items, which is 2.95% more than the average American consumer. That’s a solid amount, but when compared to Generation X, it’s clear that Gen Xers still rule the wallet.
In total, millennials spend 21.1% less than Gen X, and their spending on key categories like vehicles and tobacco is significantly lower. But millennials aren’t exactly cutting back across the board — they still splurge more than any other generation on apparel and services, spending a larger portion of their income on these than Gen Z or Gen X.
Millennials’ retail preferences are also shifting. While they are more likely to shop online, they still visit stores–with 30% shopping online and in-store in equal measures. They are also more likely than any other generation to budget carefully, with 45% of millennials saying it’s a priority.
Gen Z: The New Budget-Conscious Generation
While millennials are flexing their financial muscle, Gen Zers (born in 1997 or later) are showing more restraint. Total consumer expenditures for Gen Z are far lower, clocking in 55.9% less than millennials. For example, when it comes to holidays, Gen Z’s gift budget was 50.4% smaller than millennials’.
However, Gen Z tends to spend a larger portion of their income on entertainment, vehicles and education compared to millennials. They allocate 7.62% more of their income to general entertainment and 35.7% more to vehicle purchases. Despite having their education affected by the COVID-19 pandemic, Gen Zers have higher college enrollment numbers compared to both millennials and Gen Xers at the same age, so it shouldn’t come as a surprise that Gen Z also spends significantly more (82.7%) on education.
Gen X: The High Spenders of the Bunch
Gen Xers (born 1965-1980) continue to outspend millennials in several key areas, despite having a smaller retail spending pool overall. With overall consumer expenditures 18.2% higher than millennials, Gen X spends 7.54% more of their income than millennials on vehicles and 10.6% more on tobacco.
However, millennials are not far behind, often spending more in areas like alcohol (24.2%) and reading (15.6%). The holidays tell a similar story, where millennials shelled out $136 more than Gen X for gifts in 2023. While Gen Xers lean towards traditional shopping, being 28.4% more likely than millennials to favor in-store visits over online, they’ve adopted online shopping at a steadily increasing rate, and at 9.52% are more likely than the average American consumer to shop online at least on a weekly basis.
What Drives These Spending Habits?
Each generation’s spending habits reflect broader life circumstances and priorities. Millennials, often in the midst of family-building and homeownership, allocate a good portion of their income to necessities, but they also embrace luxury goods more than Gen Z. Their tendency to spend on experiences, brand loyalty and social media-driven purchases is notable. In fact, millennials are more likely than older generations to buy directly through a social media platform.
Gen X, by contrast, has had more time to accumulate wealth and assets. As a result, they’re more willing to invest in long-term items like vehicles and larger home improvements. They also prioritize stability in their consumer habits, often investing in quality goods and services.
Gen Z, meanwhile, is carving out its own spending style. With tighter budgets, they shop smart and often, focusing on value and stretching every dollar. Their comfort with digital tools and eye for deals reflect a generation that knows how to make less go further while still splurging on what matters most to them, like education and entertainment.
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