Wild Swings in Boomer Spending Habits

A recent Gallup analysis of Boomers’ personal spending patterns suggests these patterns vary more than stereotypes suggest.

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.

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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.

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