Baby Boomers U. S. (The Blog) |
| Prioritized Spending Between Generations Posted: 24 Aug 2012 04:46 AM PDT
The real BBUS post can be found here… Prioritized Spending Between Generations by Felicia Baratz-Savage © Baby Boomers U. S. (The Blog) . Generational implications on spending habits If you take a moment to look at the different spending and savings habits that exist between you and your parents, or yourself and your children, it’s probable you’ll notice marked differences. Although the habits you teach and the example you set for the next generation has an impact on how they view and use their financial means, there are generational implications, too. Read on to learn more about the different spending habits that exist between baby boomers and millennials. The Baby Boomers Baby boomers, or those born between the years 1946 and 1962, have historically been amongst the best consumers in support of the economy because of their free spending ways. But, as this group of consumers has approached retirement, they’ve begun to curb their spending and redirect their financial focus on saving for retirement. Approximately 79 million people in America are members of the baby boomer generation. When this group, which makes up nearly one-third of Americans, begins to save more and spend less, the results will be felt within the economy. When baby boomers do spend, they are now more inclined to spend money on experiences instead of accruing more things, according to Unity Marketing president Pam Danzinger. While in their middle age years, baby boomers tend to spend more on luxury items after having worked many years to reach a more affluent financial position. Six years ago, when this group turned 60, one-fifth of the company’s global sales took place in the United States. From hard-working to luxury buying to saving for retirement, baby boomers have gone through quite a transformation throughout the years. While on the other side of the fence, millennials are still in the early stages. The Millennials Although baby boomers were and still are ones to work hard and save for the luxuries they purchase, millennials are driven by instant gratification and currently have greater debt accrued than they do savings, according to Bankrate.com. Also numbering around 79 million, millennials have been raised during uncertain times. The tragedies of 9–11 and one news story after another of banks and other financial institutions cheating their customers has led this generation to develop a mindset of “live for today because who knows what will happen tomorrow”. Many millennials hold low-paying jobs, are unemployed or working to pay off the huge student loan debts they’ve accrued. While baby boomers focused on family purchases and expenditures when they were young adults, millennials in their 20s spend more money on travel and technology for themselves but do so with an eye on discounts, bargains and online coupons whenever possible. They define luxury items based on functionality and determine value according to the “can’t live without out” mindset, instead of defining luxury by the price tag the way baby boomers do. Shifting influence As the first millennials turn 30 years old this year, the Pew Research Center’s results from a 2010 study indicate that a shift in influence is occurring in the United States. Baby boomers, once a major defining factor in the shaping of the social and economic sectors of the United States, are now fading into the background as millennials assume that position. Perhaps the “I need it” mentality of the millennial generation has arrived just in time to compensate for the effect baby boomers’ reduced spending will have on the economy. You may also want to join the Baby Boomers US Forum for conversations by Baby Boomers about topics important to Baby Boomers! 
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