Generation
In fact, they’re the shoppers whose spending has helped fuel the economy, surprising even the most seasoned Wall Streeter with how resilient their spending habits are.
But this is changing.
The challenge of preparing for retirement over the next decade or so and continuing to support children appears to be changing their outlook.
Both scenarios – old age and supporting children financially – encourage saving. This means that the generation that relies on tapping their cards at the cashier’s office is instead focusing more on investing.
Experts say this is not a bad thing for the economy, but it represents a departure from the norm.
The middle child struggles
Research released by the Bank of America Institute last week revealed that spending among Gen
Their behavior represents a marked shift from two years ago, when the US Bureau of Economic Analysis found that Generation X contributed the bulk of spending that year.
“As a relatively young generation in numbers, (Generation
He points to data indicating that in 2022, 27% of households in America were headed by Generation X, but they accounted for 33% of total consumer spending.
But this demographic is now tightening their finances and has held back on purchasing since early 2023. Their spending fell 2% year over year in August.
Wadford points out that this shift isn’t bad news, unless you’re a company that relies heavily on Generation X’s discretionary spending.
“We saw that they were particularly slowing down or postponing their discretionary spending,” he said. luck In a video interview this week.
“Now why is that? We found that it wasn’t necessarily such an expense or cost of living issue because their wages saw, on average, enough to offset the increases in the cost of living. “It’s the fact that they’re just investing and they’re investing a lot. They are deferring some of that spending.
The logic, his note adds, is clear: “Where do Generation
A sign of optimism
Wadford added that the fact that Generation
“When I think about retirement, it is the ultimate measure of how I feel the future will turn out,” he explained.
“If I’m investing a lot for retirement, it means I think in 10 years things will be in a position where I can retire. Investments now are the ultimate sign that there is hope for the future.”
“It’s definitely something to emulate,” he added.
Change priorities
Phil LeClare is typical of the Generation X consumer that Bank of America refers to. The 53-year-old father of four runs his own public relations agency in Massachusetts.
LeClare’s children range in age from 22 to 2 1/2 years old, meaning the businessman’s financial priorities range from supporting his college-graduating son to planning for his toddler’s future.
Unlike other Generation
But in recent years, LeClair said his spending style has changed.
Despite the big expenses this summer, such as his wedding in Mexico and honeymoon in Greece, LeClaire says his priority now is to balance all his expenses with equal savings.
“I’m more aware of what’s being saved and what’s going on now than ever before in my life,” LeClair said. luck.
“I’m not someone who’s consumed by money or financial gain. But by the same token as I get older — I’ve lost both my parents, and I last lost my father a year ago — those things play a big role in changing one’s thinking about one’s own mortality and what they leave behind.”
“I like to spend money, and it’s important to me that the people I love get the things they want, but at this point in my life I look at what I’m investing in and am I using my money to make more money?”
LeClare has been self-employed for the past six years, giving him the freedom to grow or shrink his client base as needed. The result is an annual income of up to $200,000.
Despite his good salary, LeClare realizes he’s not wasting it on consumables.
“I don’t spend frivolously on things, but now I’m more concerned with my physical and mental health,” LeClair explained. “For example, this week I’m going to Florida for a few days to get back into my groove.
“Those are things I didn’t really think about when I was younger. It was just ‘go, go, go,’ from a business standpoint and from a family standpoint.”
He added: “If I’m spending money, I need to spend it on something that’s an experience for me or my family. As I get older… those things are what matter to me.”