How different generations spend their money

We hear a lot these days about generations. For example Baby Boomers, Millennials, Generation X. But which people do these generations include? Do the labels actually mean anything? And are there differences between the way different generations spend their money?

Let’s take a look!


Why are generations important?

A generation refers to a group of people who are born around the same time. Because they experience similar trends and patterns throughout their formative years, this is likely to cause them to develop a particular set of values and preferences that may be different from the generation before them.

For example, think of the huge differences in communication, entertainment, shopping, banking etc today, when compared with our parents’ and grandparents’ generations.

So understanding which generation people fit into, and the values and preferences of that generation, can be a valuable tool for many kinds of organisations around the world, from business and marketing, to social, health care and well being. It can help to connect and engage with people in different generations in different ways.

But what are these generations? Let’s take a look.


Which generation are you?

In Western society, the main generations today are split broadly as follows:

Name of Generation Year range of birth Age range in 2021
The Silent Generation 1925-1945 76-96
Baby Boomers 1946-1964 57-75
Generation X / Baby Bust 1965-1979 42-56
Millennials / Generation Y / Gen Next 1980-1994 27-41
iGen / Gen Z / Centennials 1995-2012 9-26
Gen Alpha 2013-2025 0-8


Depending where you look, there are some slight variations in the above year ranges. Some sources also include an additional generation called Xennials, born between the mid-70’s and mid-80’s. This micro-generation of people straddles both the Generation X and Millennial generations, and are described as having had an analogue childhood and digital teen years.

But the above table gives you a good indication of where you fit in the generational mix.


How do different generations spend their money?

As we have already seen, different generations will have different values and preferences, and will do things differently. This can be seen in the way they tend to spend their money.

The differences are particularly evident when we look at the Millennial generation. Here are five key ways in which they differ from previous generations, particularly Generation X.

  • Millennials are wary of debt

Millennials are less comfortable with debt than previous generations. Only around half own credit cards and many do not want one. 

They may be in debt from other circumstances, for example paying off a student loan, but will try to avoid further debt wherever possible.

  • Millennials like to pay digitally

Millennials prefer to pay for everything by debit where possible. Debit cards are a big favourite, and many are also using digital wallets. 

Millennials are setting the trend here: digital payments are expected to grow by 12% between 2021 to 2025, whereas cash is likely to become the least common mode of payment worldwide by 2022. 

  • Millennials shop mostly online

Fashion, clothing and accessories are the main items purchased online by Millennials. It’s estimated that on average Millennials spend up to half their monthly disposable income on online shopping. 

Another key aspect of this is around 45% of millennials expect next-day – or even same-day – delivery. It is important to them as part of their growing demand for convenience online.

  • Millennials actively manage their money

Over 90% of Millennials actively manage their money. They have higher expectations than previous generations of the accessibility, convenience and accuracy of personal banking products. 

They also expect to be able to do all their banking digitally on the devices of their choice, often using apps. They are more likely than previous generations to bank with newer banks such as Starling, Monzo and Revolut.

  • Millennials see themselves as savers

Over half of Millennials take saving very seriously. They see themselves as savers rather than spenders, as compared with only a third of Gen X. 

However, their priority isn’t necessarily to save for later in life, it is to finance life changes in the more foreseeable future, especially in terms of trying to get onto the property ladder.


So there are significant differences emerging in the way that generations spend and manage their money, with Millennials setting trends and helping to shape the future development of financial products and services.

If you are a Millennial, we hope that this article has given you some interesting insight as to what you do with your money. And if you are of a different generation, reading about how Millennials manage their money may perhaps inspire you to adopt some of the trends from that generation into yours.


Whatever generation you are, if you need any financial help do bear Loans 2 Go in mind. From online personal loans to regular lifestyle and financial tips we are here for you.