Daily spending among Americans ages 50 to 64, based on their own reporting, reached a low of $55 in March 2009. By last December, this group’s daily spending rebounded to a five-year high of $105 per day.
What are they spending more money on? Research revealed that while 45% of U.S. consumers spend more than they did a year ago, the increased spending was on household essentials—groceries, gasoline, utilities and health care—rather than on discretionary purchases such as travel, dining out, leisure, consumer electronics and clothing.
About two in five Baby Boomers (44%) in that same study reported they were spending more than a year ago, and their increased spending followed the same pattern.
According to demographers, Boomers fall into one of two groups: leading-edge Boomers (born between 1946 and 1955), and trailing-edge Boomers (born between 1956 and 1964). In general, a higher proportion of leading-edge Boomers spend more today than a year ago. Slightly more trailing-edge Boomers are spending less.
Among other findings:
- They’re preparing for retirement. Comparing each group’s spending levels from a year earlier, more than twice as many trailing-edge Boomers spend more today on retirement investments than do leading-age Boomers.
- They’re exhibiting thrifty behavior. Discretionary spending categories—leisure activities, consumer electronics and travel—all show negative net spending changes. Non-discretionary categories all show positive net spending changes. The exception: gas or fuel, which has seen unprecedented declines in prices over the last few months due to plummeting oil prices.
- Older Boomers lighten their expenses. Often, since they’re no longer burdened with such significant financial responsibilities as tuition, mortgages, children’s expenses and long-term investments, leading-edge Boomers spent more than their younger counterparts in the past year in all categories except investments.