American spending habits by generation for 2024

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American spending habits fluctuate based on factors like the economy, average cost of living and global events. Interestingly, spending trends don’t always move in predictable patterns—NPR reported elevated spending in 2023 despite rising inflation costs.

Here, we’ll review American spending habits to paint a clearer picture of our potential expenses in the near future. We’ll also share personal finance resources that can help you refine your budget and reach your savings goals.

Table of contents:

• Overview of American spending habits
• Teen spending habits
• College student spending habits
• Gen Z spending habits
• Millennial spending habits
• Baby boomer spending habits
• Enhance your credit with Lexington Law Firm

Overview of American spending habits

According to the Bureau of Labor Statistics (BLS), Americans spent an average of $72,967 in 2022. This number suggests a 9 percent increase in American spending habits from 2021 (wherein the average annual expenditure was $66,400) to 2022. How much we spend makes a lot more sense when we break down what exactly our money is going toward.

What do Americans spend the most money on?

Expenditure	Cost
Housing	$24,298
Transportation	$12,295
Food	$9,343
Personal Insurance and Pensions	$8,742
Healthcare	$5,850
Entertainment	$3,458
All Other Expenditures	$2,080
Cash Contributions	$2,755
Apparel and Services	$1,945
Education	$1,335
Personal Care Products and Services	$866

In 2022, the BLS noted a 7.5 percent increase in income to coincide with a 9 percent increase in expenditures. Among the different categories, spending on food increased by 12.7 percent from 2021 to 2022. Vehicle purchases and entertainment expenses dropped by 6.9 percent and 3.1 percent, respectively.

These numbers fluctuate depending on the circumstances of a particular household. For example, the BLS found that 39.4 percent of a one-person household’s expenses go toward housing costs, while 32.1 percent of a two-person household’s funds are spent on housing.

To better understand American spending habits, we can examine the average expenditures of various groups based on factors such as age and education.

Teen spending habits

According to the United States Census Bureau, more than 43 million teenagers live in America. Gaining a better understanding of teen spending habits is important, as teens spend about $63 billion each year.

More than 50 percent of young adults (16 to 24) were employed in 2023. Some of the top brands that teens spend their new income on include Chick-fil-A, Netflix and Snapchat. In 2024, the BLS anticipates that more teenagers will prioritize school attendance over traditional means of employment—which could affect where and how often they’re spending money.

College student spending habits

College student spending habits fluctuate as changes to the American education system become more widespread. Four years in college is no longer the norm—many students take anywhere between an extra semester to a few extra years to graduate. This extra time incurs additional costs (like tuition and rent) that impact spending habits.

In addition to money spent on tuition, college students are purchasing new tech, tickets to festivals and events and lots of food. Older students with more life experience also have to balance school expenses with other mandatory purchases like groceries for the household.

Gen Z spending habits

Generation Z includes anyone born between 1997 and 2012. Gen Z spending habits reportedly differ even more than their older millennial counterparts. This generation grew up completely immersed in the digital era and is very likely to shop online.

A 2021 study by Elmira Djafarova and Tamar Bowes found that 41 percent of Gen Zers are impulse buyers. Quality and value are of the utmost importance to this generation. They may be quick to switch brands if they believe they’re getting better overall value from a different company.

Millennial spending habits

Millennials are generally defined as the generation born between 1981 and 1996. This group is known for making financial decisions that are strikingly different from those that came before them.

Millennial spending habits include increased online shopping, a preference for experiences over material things and an openness to generic brands if the choice saves money.

Baby boomer spending habits

Baby boomers are those born between 1946 and 1964. This group is filled with people who are close to or already in their retirement years. In contrast to their parents, who were born in the Great Depression, boomers expect to have a fun retirement.

They’re looking forward to experiencing new places and trying new things. However, many baby boomers are facing retirement issues due to a lack of savings and mounting debt. Despite it all, baby boomer spending habits indicate that this generation holds more than 50 percent of the wealth in the United States.

Enhance your credit with Lexington Law Firm

American spending habits can fluctuate based on a person’s background, but credit scores impact all of us in many ways. At Lexington Law Firm, we can help you understand the nuances of credit. Get your free credit snapshot now to see your credit score and get a free credit assessment to help you get started.

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