Many parallels have been drawn between baby boomers and millennials because they both represent high-population generations, and many of the latter are offspring of the former. When it comes to finances, there are similarities between the two groups — including inadequate retirement savings. But there are differences as well, such as how they spend and budget money.
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New research from Business Insider looked at the differences in spending patterns between boomers and millennials at similar ages. As part of the research, Business Insider analyzed spending data for adults ages 25 to 34 in 1989 (younger boomers) and 2022 (millennials) on food, housing, education and other expenses.
One thing the study found was that millennials are spending a lot more on healthcare and rental housing than boomers did at the same age. For example, in 1989 the average adult ages 25 to 34 spent $755 on health insurance. By 2022, that figure had more than tripled.
The steep rise was partly because of normal inflation and partly due to healthcare costs that have ballooned even higher than inflation. Healthcare costs this decade alone have risen considerably due to the impact of the COVID-19 pandemic.
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Boomers vs. Millennials on Housing
In terms of rental housing: Based on average data, millennials in 2022 spent roughly 60% more on apartments and other rental housing than their boomer peers did in 1989, Business Insider reported. Again, normal inflation has played a part in the increase. But so does the fact that millennials are much less likely to own a home between the ages of 25 and 34 than boomers at the same age.
Last year, USA Today cited research from the University of Cambridge showing that by age 35, 62% of boomers owned homes vs. 49% of millennials. Around 14% of millennials had negative net worth compared to 8.7% of baby boomers. Lower rates of home ownership have led to higher demand for rentals, driving up rent prices.
Here are some other highlights from the Business Insider study:
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Spending for owned dwellings in 2022 more than doubled from 1989 before adjusting for inflation.
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Millennials have put a higher budget priority on food items such as fresh fruits and vegetables and seafood.
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Millennials spend more on gas and motor oil than boomers.
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Boomers tended to spend more on used cars and trucks.
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This article originally appeared on GOBankingRates.com: This Is How Millennials Budget Compared to Boomers at the Same Age
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