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  • Quynh Nguyen

How Much do Financial Values Vary by Generation?

How does age factor into shopping habits and financial values? Not surprisingly, the answer is "a lot." For reference, this is how we defined the following generations:

  • Baby Boomers (born 1940 - 1965)

  • Gen X (born 1966 - 1979)

  • Millennials (born 1980 - 1995)

  • Gen Z (born 1996 - 2010)

The US labor force is going through a dramatic transition in terms of its generational composition. Though Baby Boomers currently make up over 25% of the workforce, about 10,000 of them are retiring each day, which is rapidly shifting focus to the succeeding generations, particularly as Gen Z is beginning to graduate college.


Gen Z Prioritizes Financial Security

America’s youngest consumers, Gen Z (born 1996 - 2010) are just starting to graduate from college and are finding themselves with growing disposable income. However, many still rely on parental support. Almost half of Gen Zers (46%) say their parent, guardian or another family member pays for their housing costs and 42% say the same about health insurance.


As this young workforce establishes their careers, Gen Z will prioritize financial security over “personal fulfillment.” This is consistent with our own inZa Lab 2020 Gen Z Consumer Insights Report findings, in which 89.2% of Gen Zers told us that price was the biggest factor that Gen Z considers when making a purchase decision.


As this young cohort gains more financial independence, they will be making their retirement savings a priority, while incorporating more fixed expenses like rent, utilities and groceries into their monthly spending. Though 83% express the desire to be financially dependent, a large amount feel financially restrained by expenses and debt. Making price-conscious offerings will be key to targeting this generation.


Millennials Want Online-First Convenience

Millennials spend more on convenience, online shopping, food away from home, experiences and travel, streaming services and social impact. The U.S. Department of Labor shared that millennials spent 47% of their food budget on food away from home, more than all other groups. On top of that, 64% of 25- to 37-year-old streamers are paying for two to four services, with older millennials are even more likely to pay for additional platforms.


Many traditionally in-person services have transitioned to cater to this online-first preference. In fact, 36% of millennials reported buying auto insurance online, and 30% bought homeowners insurance online.


Gen X Desires Transparency and Simplicity

Often dubbed the “forgotten” or “phantom” generation, this group of 40-55 year olds is often overlooked by marketers, despite wielding significant buying power. In their prime earning years, this generation currently earns 31% of total US income, even though they only comprise 25% of the population. This means a higher-than-average household income and considerable spending power, totaling $2.4 trillion.


According to the US Department of Labor, Gen X outspends all other generations when it comes to housing, clothing, eating out, and entertainment.


Prioritizing balance and flexibility, they're looking to retirement with the 401(k) as their savings method of choice. Sandwiched between Baby Boomers and Millennials, Generation X members often balance caring for their children with supporting their aging parents. It also explains why half of Generation X say they're shouldering far more financial responsibilities than their parents did, and 39% feel they'll never have as secure a financial life as their parents' generation.


Baby Boomers are Adapting to Online

There are 73.4 million baby boomers in the U.S. that are close to or already in their retirement years. Holding $2.6 trillion in buying power, they’re credited as one of the wealthiest generations to date and are still economically powerful. In fact, four out of five retailers attribute nearly 50% of their sales to boomers.


However, boomers are less motivated by price than their younger counterparts and are loyal to the styles and brands they like. Consumers 65 and older, on average, spent a total of $1,615 online from January through October in 2020, a 49% increase from a year earlier, making them the fastest-growing cohort of online shoppers.

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