Gen X Spending Patterns Are Shifting as Costs Rise

Comprised of around 65 million individuals now age about 46-61, most in their prime earning years, the generational cohort spends more than any other age group. The typical Gen X American spent $96,941 in 2024, $18,000 more than the average consumer, U.S. Bureau of Labor Statistics data shows.

But inflation and rising living costs are making things tough for consumers of all ages, and what’s often called “the forgotten generation” is no exception. Half of them struggle to afford basic day-to-day expenses for housing, food, healthcare and the like. More than 4 in 10 (43%) worry about their ability to save. Concern about costs for housing and health care and credit card or personal debt plague them (37%, 34% and 32%, respectively).

Typically born between 1965 and 1980, only 1 in 6, or 16%, say they don’t worry about their finances. The other 84% report having at least some trouble in meeting their daily costs of living and budgets.

That split reflects the K-shaped economy, in which two broad groups of consumers experience very different financial pressures. A much smaller number of wealthier individuals in the top arm of the letter K are thriving, while lower-income consumers in the bottom arm are stagnating or declining.

With tariffs, inflation and higher living costs eating away at their paychecks, many Gen Xers are making changes to how they spend. For instance, 2 in 3 who report feeling financially pressured (or 67% of all Gen Xers) are dialing back their everyday spending on basic such as groceries. More than 1 in 2 of those individuals, and 52% overall, are steering clear of larger purchases, perhaps a new sofa or car, or new investments.

Sure, Americans of all ages are worried and cutting back: Half of all consumers are concerned about their ability to cover their daily living expenses. But Gen X’s heightened worry about saving and planning for retirement and the future (43% vs. 38% overall) is an additional negative pressure on their consumption patterns.  When you’re closer to leaving the workforce for good, the economics of spending now vs. saving more now becomes more pressing. The median Gen Xer has saved just $150,000 for a retirement that could last 30 years, a Natixis Investment Managers analysis from 2024 said. Retirement-fearing Gen Xers who cinch their belts now can pull a big chunk of overall consumer spending down.

Gray Skies Ahead

It’s probably not going to get much better for Gen X finances soon, at least according to their own predictions. As of last September, only 34% said they were optimistic about the U.S. economy, while 45% had more of a doom-and-gloom outlook. America’s overall consumer sentiment in January is down nearly 25% compared to a year ago, University of Michigan data shows.

Last August, less than half of all Gen Xers told PYMNTS Intelligence that they thought they’d be able to increase their savings over the next 12 months. Instead of approaching their personal finances with a growth mentality, these consumers are trying to figure out how to make it through this time as little damage as possible.

For more on how different generations are managing today’s financial difficulties, check out PYMNTS Intelligence’s Generational Pulse report.