Gen X Spending Power

But their spending power is very visible in retail; Nielsen reports that Gen X will spend $15.2 trillion in 2025. Their annual spend will peak at $23 trillion by 2035, and they’ll continue as the highest-spending global cohort until 2033.

While millennials are the world’s most educated generation, they’re also poorer than any other demographic was when they were circling age 40. White collar millennials are losing jobs left and right to AI, and they don’t own the homes or boast the hefty nest eggs of their Gen X predecessors. Sprinkle in unprecedented global political upheaval and it makes sense that, despite all of our talk about “Xennials,” Gen X and millennial purchasing behavior remain bifurcated.

A deeper look at the factors contributing to the spending rift between Gen X and millennials reveals the trends behind some otherwise thrifty millennial consumers’ willingness to take on debt.

“Negative Wealth” Dents Next Gen Spend

To say financial insecurity is on the rise since last year is an understatement. Nearly half, a solid 46 percent, of millennials say they do not feel financially secure––second only to 48 percent of Gen Z. As student loan forgiveness programs halt and many white collar jobs are replaced by AI, it’s not surprising that the world’s most educated generation is struggling to gain a financial foothold.

Saying that millennials are financially struggling is actually underselling the issue. Next gens are battling “negative wealth” –– their debt outweighs their assets, often leading to a strained financial life and potential negative health outcomes down the line. Managing this sort of stress may be why BlueCross BlueShield found millennials report an 18 percent increase in prevalence for depression and 37 percent increase for hyperactivity over to Gen X at the same age.

It’s easy to see why millennials are depressed––they carry an average of $78,396 in consumer debt. That’s in addition to the rising cost of living, skyrocketing student loan debt, and tariff concerns. In the era of artificial intelligence, their parents’ concept of lifelong job security is a thing of the past. 

Gen X Built Wealth Before Upheavals

The bleak job outlook for just-launching Gen Zers and the AI-diluted professional landscape for (once) white-collar millennials informs both generations’ reluctance to spend. According to the World Economic Forum’s Future of Jobs Report 2025, by 2030, an estimated 92 million jobs will be displaced by AI. Unlike Gen X and boomers (many facing retirement in advanced leadership positions), millennials tend to be less established in their careers and thus more likely to be replaced by the AI workforce.

But Generation X is better situated to survive the technological assault on consumers’ economic prospects. They may be leveraged between responsibilities to their aging parents and Zennial children, but they don’t face the student debt, housing, and career crises throttling subsequent generations. Of course, shouldering the wellbeing of their parents and offspring means that Gen X is saddled with the most non-discretionary expenses such as mortgage payments, education, and healthcare.

In the years to come when their parents pass on, bequeathing  their wealth to Gen X, it’s likely that a portion of Gen X’s non-discretionary spending will become discretionary. The Sandwich Generation may finally get the opportunity to spend selfishly.  

Gen X Splurges While Millennials Scrimp

Here’s a next gen challenge. How can retailers sell to segments of young people who don’t accept traditional societal structures? Millennials are thrifty, prioritizing cutting back and being fiscally conservative.  The oldest are entering middle age (that milestone may need revising since it is predicted this generation may live well beyond 100 years and middle age may shift to their 50s and 60s, not 40s). They lived through the 2008 recession and now face layoffs/industry upheavals due to business model changes. Home ownership and a secure retirement are elusive or off the table for most millennials.  Some of them will never experience the financial security of their predecessors. Nonetheless, they want to lead fulfilling lives despite the dismal optics.

And therein lies the reason that some millennials are using non-existent discretionary income to fund positive life experiences. And many millennials (boomers, gird your loins) have no intention of repaying that student debt within their lifetimes. For some young folks who feel the employment system has been rigged against them since birth, the inability to pay off one’s “debt” to said system doesn’t feel like a character flaw.

The red flags are rising. The future of the loan and banking industry could change drastically in coming years. About 40 percent of Gen Z and millennials are already willing to use credit card debt for discretionary expenses. That’s a huge jump from the 20 percent of Gen Xers willing to do the same. The differences between the spending habits of both generations are less rooted in the criticism levied against millennials for lacking ambition or moral fortitude. It may be more a matter of pragmatism.

Generation X, on the other hand, spends more because they can. Despite dissimilar economic outlooks, one thing unites millennials and Gen X: They prioritize value. While Gen X believes they’ll get that value from trusted brands, millennials believe they’ll get value from rigorous comparison shopping on multiple channels. Both their priorities dovetail in the continued search for quality products at value-driven price points. In terms of next gens’ financial outlooks, retailers just might want to follow the money.