Here’s How Much Gen Z Spends Per Year. How Do You Compare?
Gen Z’s Spending Habits: Why They’re the Most Budget-Conscious Generation
When it comes to annual spending, Gen Z is far more frugal than older generations. According to 2023 data from the U.S. Bureau of Labor Statistics, Gen Z spent an average of $52,891 significantly less than millennials ($81,589), Gen X ($95,692), and baby boomers ($70,207).
This thriftiness reflects Gen Z’s stage of life: many are teens or young professionals just starting their careers, often without children or major financial obligations. Their modest incomes and minimalist lifestyles make them the most budget-conscious generation yet.
- Gen Z’s average annual spending is significantly lower than that of millennials, Gen X, and baby boomers—reflecting their early career stage and modest income levels.
- Most Gen Zers are either teens living at home or young professionals in their mid-20s. With fewer financial obligations, they tend to spend more cautiously.
- Unlike older generations, few Gen Zers have children—meaning they’re not weighed down by costly child care expenses, which can consume up to 16% of a family’s income.
Key Takeaways
Why Gen Z Spends Less: Income, Age, and Life Stage Matter
Gen Z includes teens still living at home and young professionals in their mid-20s. Compared to older generations, they simply don’t have the same earning power.
A survey for Self found that Gen Z earns an average of $1,910 per month or just $22,925 annually. That’s far below the disposable income of millennial-led households ($97,866) and Gen X households ($113,886) in 2023.
Lower income means less room for spending. Teens have limited financial independence, and early-career professionals are still climbing the salary ladder while millennials and Gen Xers are often in peak earning years.
Fewer Gen Zers have children or major financial obligations, which also contributes to their lower spending. Their lifestyle is leaner, and their budgets reflect it.
Impact of Children and Dependents: Why Older Generations Spend More
Older generations tend to have more dependents, which drives up their annual expenses. In contrast, most Gen Zers haven’t started families yet only 16% have children.
By their mid-30s, millennial women had given birth to an average of 2.02 children, while Gen X women averaged 2.07. These family dynamics come with steep costs: in 2022, full-day child care for one child ranged from $6,552 to $15,600 annually, consuming 8.9% to 16% of a household’s median income.
Millennials and Gen Xers with multiple children face even higher expenses. And for Gen X, caregiving often extends beyond kids many also support aging parents, a financial strain known as the “Sandwich Generation.” AARP reports that caregivers spend roughly 25% of their annual income on caregiving costs.
Baby boomers, meanwhile, are retired or nearing retirement. While they may be cutting back, their spending still exceeds that of Gen Z likely due to accumulated wealth and lifestyle habits built over decades.
The Bottom Line
Gen Z spends significantly less than millennials, Gen X, and baby boomers because they’re just getting started. From teens living at home to young professionals in their first full-time roles, this generation earns modest incomes and maintains leaner budgets. Their spending habits reflect early career realities, fewer dependents, and a focus on financial caution.
