Gen Z and boomers are spending more alike

Gen Z and baby boomers are often treated as opposites. One is associated with flexibility, prioritizing experiences and online purchases, while the other emphasizes saving and restraint. But recent data suggests that those differences are narrowing, particularly as rising prices reshape how people spend.

A 2026 global consumer trends report found that about 40 percent of consumers are switching to cheaper alternatives or buying smaller quantities as higher costs affect everyday spending. Data from the Bank of America Institute shows similar patterns among younger consumers, with spending increasingly concentrated in essential categories. The shift is not confined to one country. It is visible across major economies, including the United States, the United Kingdom, and parts of Europe, where inflation and housing costs have remained elevated in recent years. The data points to increasingly similar spending patterns across age groups faced with restrictive economic conditions.

A shift toward lower-cost consumption

Gen Z, typically defined as those born between the late 1990s and early 2010s, is entering the workforce in a period marked by higher rents, rising borrowing costs, and more limited wage growth in certain sectors. Baby boomers, born between the mid-1940s and mid-1960s, have historically approached spending differently, often placing greater emphasis on saving and managing household budgets. These differing starting points are now being shaped by similar economic constraints.

Across income groups, spending is becoming more selective. The 2026 report by global consulting firm Capgemini finds that roughly two in five consumers globally are shifting toward lower-cost products and cutting back on purchases, with younger consumers showing greater responsiveness to price changes. These adjustments are most visible in categories where prices have risen the fastest, such as food, energy, and transport, where spending is harder to avoid.

The shift extends across income levels. Lower-income households, already spending most of what they earn on essentials, have limited room to adjust beyond cutting back. Middle-income households, which typically have more flexibility, are now making similar trade-offs by comparing prices more frequently, delaying purchases, and opting for cheaper alternatives. In practical terms, discretionary spending on items like dining out, travel, and entertainment is being reduced as households reallocate toward essentials.

Younger consumers under constraint

Within that broader shift, younger consumers are adjusting more quickly. Data from the Bank of America Institute shows that Gen Z is allocating a larger share of spending toward essentials such as housing, food, and transport. At the same time, spending on non-essential categories is growing more slowly. The same data points to limited savings buffers, meaning many younger consumers have less capacity to absorb rising costs without changing how they spend.

Survey findings point in the same direction. The 2025 global Gen Z survey by Deloitte identifies cost of living as the top concern for respondents, with many reporting that they are cutting back on day-to-day spending and postponing larger purchases.

These adjustments are visible in everyday decisions, from cooking at home more often to choosing lower-cost products and delaying upgrades or replacements. Spending is not only lower in some categories, it is also more tightly controlled overall.

Convergence across generations

The result is a noticeable overlap in how different age groups are spending. Research by the International Monetary Fund shows that sustained inflation pushes households to shift spending toward essential goods, especially among those with limited savings. Younger consumers tend to fall into this group, with lower savings and higher exposure to rent and borrowing costs.

This dynamic is playing out across economies where inflation has remained elevated since 2021, including the United States, the United Kingdom, and parts of the eurozone. In these environments, higher costs are constraining how households allocate spending, reducing flexibility across income groups.

The outcome is not identical behavior across generations, but a narrowing gap. For younger consumers, these adjustments tend to appear earlier, reflecting lower savings and greater exposure to rent and borrowing costs. Among older consumers, similar patterns align with longer-standing habits of managing expenses. While income and wealth levels still differ, the structure of spending—what is prioritized and what is delayed—is becoming more similar in response to shared economic pressures.