Millennial vs. boomer budgets: How spending has changed for young adults in the last 30 years (2024)

In the intervening 33 years, how younger adults spend their money has changed dramatically. Business Insider analyzed spending data for adults aged 25 to 34 in 1989 — which covers part of the baby-boomer generation — and 2022 — which largely consists of millennials — on various kinds of food, housing, education, and more.

In 1989, people between 25 and 34 were spending more, when adjusted for inflation, on beef, alcohol, and homes they owned than this age group did in 2022.

Here's how expenditures looked between the two:

For this analysis, Business Insider compared average annual expenditures for households that were headed by 25- to 34-year-olds in 2022 to those in 1989. We used data from the Consumer Expenditure Surveys program published by the Bureau of Labor Statistics. BI calculated inflation-adjusted figures for 1989 using consumer price index data to put those costs into 2022 dollars.

We wanted to examine how spending for baby boomers when they were young adults compared to millennials who were around the same age in 2022.

The differences in average spending between young adults in 1989 and 2022 could be due to changes in prices or shifting habits.

Take a look at rented dwellings, for example. The consumer price index data for rent of primary residence suggests the increase between 1989 and 2022 can be largely explained by a rise in prices, but that data also implies that younger adults are more likely to rent an apartment rather than own a home.

Millennials and Gen Zers also have different habits and living situations than older generations. For example, millennials are finding it hard to become homeowners in the US and Gallup survey results show that adults under 35 who drink alcohol are consuming fewer drinks on average than those under 35 years ago.

Taken together, the data offers a window into how young adults' budgets have changed over the past three decades, either due to rising costs for things like healthcare, seafood, fresh fruits, housing, and used vehicles, or because of changing habits and lifestyles. Below is a closer look at what's going on.

Millennials are spending a lot more on healthcare and rented housing

Health-insurance spending stands out between the average adult aged 25 to 34 in 1989 compared to 2022. After adjusting for inflation, the average person in that age group spent $755 in 1989. In 2022, it was over 200% higher.

A BLS report from November 2023 by Grace Hill looked at the effects of the pandemic on healthcare spending overall and broken down by age groups and other groupings.

"The only age groups to increase overall healthcare spending in 2020 were the 25–34- and 45–54-years age groups," the report stated. "These age groups had the largest increases in health insurance expenditures: the largest component in healthcare spending."

Additionally, younger adults were spending more on rent and related expenses in 2022 than younger adults were in 1989. Based on average data, this group was spending about 60% more on apartments and other rented housing.

Millennials are spending less on used vehicles and mortgage interest

In 2022, the average young adult spent more on gas and motor oil than this group in 1989. However, they weren't spending as much on used cars and trucks.

Data not adjusted for inflation shows that used car and truck expenditures increased more than the CPI for used cars and trucks between 1989 and 2022.

A December BLS report about consumer expenditures said households in general, not just among younger adults, were spending more in 2022 on rent and related expenses and owned homes than in 2021.

"High home prices, high mortgage lending rates, and particularly high rental rates for apartments placed upward pressure on spending over the year," the report said. "Mortgage interest and principal payments are essential expenditures for owned dwellings, and a rapidly changing mortgage environment sent an exogenous shock through the market."

The report added that the high average mortgage rate in 2022 led to "consumers on the margin out of owned dwellings and into the rental market."

Though BLS doesn't directly track price changes for owned housing, it estimates them with a measure of owners' equivalent rent of residences, which is up over 160% between 1989 and 2022. Meanwhile, younger adults' spending for owned dwellings was up over 120% before adjusting 1989 expenditures for inflation.

Younger adults in 2022 spent more money on fresh fruits, vegetables, and seafood

In 1989, people between 25 and 34 spent less on fresh fruits and vegetables — including processed vegetables — than those in this age range decades later. The average person in this cohort spent 71% more on fresh fruits in 2022 than their counterparts in 1989. Plus, they spent 22% more on fish and seafood in 2022 and 4% more on poultry.

While not the exact years we looked at for our analysis, a 2016 report from the Pew Research Center shed light on how eating habits changed between 1970 and 2014; there were notable increases in chicken and cheese consumption over that time.

We can also look at consumer price index data to see how inflation impacted food spending. Before adjusting 1989 data for inflation, younger adults in 2022 spent 304% more on fresh fruits than younger adults in 1989. Over that period, prices for fresh fruits, based on the CPI, were up by nearly 170%, meaning that while part of the change in spending between the two years can be explained by price increases, younger adults were also eating a lot more fresh fruit in 2022 than in 1989.

In 2022, younger adults spent less on alcohol, beef, and dairy products

Average annual spending data shows that the average younger adult in 2022 spent almost 40% less on beef than the average younger adult in 1989. They also spent about 55% less on fresh milk and cream. The 2016 Pew Research Center report also found that people were eating a lot less beef in 2014 than in 1970. The same was true for drinking milk.

Based on our analysis, the average adult between 25 and 34 spent more on nonalcoholic beverages and less on alcoholic beverages in 2022 than the average young adult in 1989. A Gallup post shows alcohol drinkers who were between 18 and 34 in 2021 to 2023, which would also include Gen Z, had an average of 3.6 alcoholic drinks in the past seven days. Between 2001 and 2003, the average consumption was 5.2 drinks among drinkers aged 18 to 34.

Our analysis found that younger adults in 2022 weren't spending as much on cereals and cereal products — which included "ready-to-eat and cooked cereals, pasta, flour, prepared flour mixes, and other cereal products such as cornmeal, corn starch, and rice" — as younger adults were in 1989. Based on reporting from multiple outlets, cereal has fallen in popularity while breakfast sandwiches, bars, and other items that are easy to eat on the go are ​now popular.