Here’s How Much Gen Z Spends Per Year. How Do You Compare?

When it comes to annual spending, Generation Z spends less than older generations, such as millennials, Generation X, and baby boomers. So, how thrifty is Gen Z compared to their older counterparts?

In 2023, Gen Z spent $52,891 on their average annual expenses, according to the most recent data from the U.S. Bureau of Labor Statistics. Millennials spent considerably more, $81,589, and Gen X spent the most: $95,692. Baby boomers spent $70,207.

Key Takeaways

• Based on average annual spending data, Gen Z spends less than millennials, Gen X, and baby boomers.
• Gen Zers are teenagers still living at home and young professionals in their mid-20s. They earn a modest income and spend accordingly.
• Few Gen Zers have children of their own and are not burdened by the high costs of paying for child care.

Why Is Gen Z Spending Less?

Gen Z includes teenagers living at home and young professionals in their mid-20s with full-time jobs. They may lack the spending power of older generations.

According to a survey conducted for Self, Gen Z respondents earned an average of $1,910.39 per month. Their average annual salary was $22,924.68. Low earnings mean less income for spending, which may be why Gen Z is spending so less than other more affluent generations.

In 2023, the disposable income of a household led by a millennial was $97,866 per year. Households led by a Gen Xer had a disposable income of about $113,886. Both are much higher than the average annual earnings of Gen Z.

A teenager living at home doesn’t have much earning or spending power compared to millennials and Gen Xers who are deep in their careers. Even someone in their mid-20s at the beginning of their career will often earn and spend less than more experienced professionals and other workers.

Impact Of Children and Dependents

Older generations are more likely to have dependents whom they care for, and that increases their annual expenses considerably. In contrast, many Gen Zers may not have children yet.

Only 16% of Gen Zers have children. In 2018, millennial women had given birth to an average of 2.02 children. At a similar age, Gen X women had given birth to an average of 2.07 children.

The high costs of child care may impact millennial and Gen X households with young children. American families spend 8.9% to 16.0% of their median income on full-day child care for just one child, with annual prices ranging from $6,552 to $15,600 in 2022. Families with more than one child face additional expenses.

Many Gen Xers have caregiver duties beyond their children. Some are also caring for aging parents. According to AARP, caregivers on average spend a quarter of their annual income on caregiving expenses.

Baby boomers are retired or approaching retirement and may be limiting spending because of this. Even so, their annual spending is still higher than that of Gen Z.

The Bottom Line

When it comes to average annual spending, Gen Z spends less than millennials, Gen X, and baby boomers. Gen Z ranges from teenagers to people in their mid-20s with their first full-times jobs. This generation is young in their careers, make modest incomes, and spend much less than other older generations.