Young Americans’ living expenses totalled $67K in 2022 — $5K more than it cost their parents back in 1989. Here’s why it’s not an inflation issue

Carpets are out, soy milk is in

What’s clear from the Business Insider analysis is that trends have a huge impact on spending.

For instance, in 1989, wall-to-wall carpeting still dominated the home decorating trends. The 25-to-34-year-olds of the time spent an average of $139 a year on floor coverings.

But in 2022, minimalist fashion reigns and bare floors are what the younger generations want. Which means they only spend an average of $24 on floor coverings.

Another big fad can be seen in food consumption. Millennials currently spend 55% less on fresh milk and cream and 29% less on alcohol than their 1989 counterparts.

The plant-based movement likely plays a part in the decreased spending on dairy items. Younger consumers see non-dairy alternatives as better for the environment (though some argue they may be worse), increased food sensitivities and good marketing, according to a 2024 University of North Carolina paper.

The decrease in alcohol consumption, on the other hand, may be less a reflection of actual food consumption and more a reflection on attitudes about health. Gen Z is slightly younger than millennials, but 36% of them are going sober for their mental health, according to a recent survey from marketing company, NCSolutions.

Drinking also can be costly. You can save over $1,000 a year by abstaining from it — another reason that NCSolutions says that young people are staying away from booze.

Kiss your credit card debt goodbye

Millions of Americans are struggling to crawl out of debt in the face of record-high interest rates. A personal loan offers lower interest rates and fixed payments, making it a smart choice to consolidate high-interest credit card debt. It helps save money, simplifies payments, and accelerates debt payoff. Credible is a free online service that shows you the best lending options to pay off your credit card debt fast — and save a ton in interest.

Explore better rates

Homes, honors and health care

The largest expenses that are pushing millennials to spend more than boomers are health care, education and rented housing.

Millennials spend 81.6% more on education and 59.5% on rented dwellings than boomers would have in 1989 — but that should come as no surprise. Stories chronicling the high amounts of student loan debt young people carry or the increasingly expensive rental crisis are a dime a dozen these days.

But the 207.8% increase in health insurance spending is a notable change. Health care spending in general has skyrocketed in the intervening three decades. Private insurance costs and health care expenses have gone up, but younger generations may also be investing more in their wellness, whether that be through therapy or personal training.

The 80s were a time when fitness really started to take off — think Jane Fonda’s aerobics and jazzercise. In the past 40 years, the “wellness industry” has grown substantially and is now worth $5.6 trillion, according to the Global Wellness Institute’s 2023 assessment.

And many young people are obsessed with their wellness journeys. McKinsey says that Gen Z in particular is more attuned to their health and fitness than other generations, due to exposure on TikTok to skincare routines, exercise regimes and mental health talk.

This awareness of health can generally be seen as a good thing, but it does add up. People spend an average of $722 per year on their appearance, according to a 2022 study from Advanced Dermatology. A gym membership can go up to $40,000 a year if you want one that will maybe help you live longer, according to the New York Time. Psychology Today says that one therapy session can cost between $100 and $200 a session — and isn’t always covered by insurance.