- - Baby Boomers vs. Millennials: Who’s Actually Better With Money?

Sarah Li CainNovember 6, 2025 at 5:00 AM

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kate_sept2004 / iStock.com

Baby boomers and millennials are obviously at different life stages and therefore, the types of financial decisions they’re managing. On one hand, you’ve got boomers getting closer to traditional retirement, whereas millennials are still navigating student loans, high housing costs and mortgages.

Each generation seems to think they’re “better” with money. The truth is what is meant by better? Find out below.

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The Wealth Gap Is Not What You Think It Is

Baby boomers hold a lot of wealth in the US. According to the latest data from the Federal Reserve, this generation holds around $89 Trillion of the country’s wealth. This is around 50% of the total household wealth.

Millennials though, own around $26 of the total U.S. wealth.

Is this because boomers are inherently “better” with money? Probably not. It could be from the fact that they’ve had more time to accumulate their wealth. Plus, boomers most likely benefitted from lower housing costs, more steady wage growth and several bull markets during their accumulation phase.

Even though millennials are lagging behind, the Federal Reserve did find that older millennials did have 37% more median wealth than expected based on cross generational trends.

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Spending Habits Also Differ

According to data compiled by SmartAsset, millennials spend an average of around $52,874 per year, compared to boomers at $63,325. Boomers may spend less on housing, but they tend to spend more on healthcare and home improvement.

Millennials, on the other hand, tend to prefer paying for experiences and digital services like subscriptions, according to The Future of Commerce. They also tend to spend more on housing.

Feeling Squeezed by Debt and Credit

Both generations are feeling the burden from their debts, but the type they have isn’t the same. Boomers typically are still paying off mortgages and credit cards, with the average credit card balance sitting at $6,795 according to Experian.

Millennials are still dealing with student loan debt, with an average balance of $40,438, with 39.9% of all borrowers being of this generation, according to EducationData.org.

Whereas boomers may be taking on debt for housing reasons, millennials are still working through their schooling costs.

Attitudes Towards Investing and Retirement

Boomers generally prefer more stability like dividend stocks, bonds and CDs. They’ve also had more time to invest.

Let’s not forget that their lower mortgage payments and pensions help to give them that sense of “stability.”

Millennials sadly can’t take advantage of pensions, as many are going away. So this generation needs to probably invest more and for longer in places like IRAs, 401k plans and securities like ETFs and index funds.

Financial Literacy Knowledge Differs

According to FINRA’s National Financial Capabiliity Study, boomers typically score higher on more traditional financial concepts (think compound interest and inflation). Millennials tend to do better when it comes to topics like using budgeting apps, comparing fees and managing investments online.

Essentially, the two generations each have their own ways in which they’re savvy with money. In the end, it really isn’t about your age. Rather, it has to do with the circumstances of your generation and how you adjust.

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This article originally appeared on GOBankingRates.com: Baby Boomers vs. Millennials: Who’s Actually Better With Money?

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Source: “AOL Money”