Cost-of-living pressures persist at a heightened level. In January, just over one in two U.S. adult consumers said they found it financially challenging to manage their daily living expenses, a rate largely unchanged since last October. The pocketbook pressure is anchored in nondiscretionary, recurring expenses, not in temporary spending spikes across food, housing and healthcare.
While financial stress looks similar across age groups, its burden isn’t evenly distributed. Younger consumers, many early in their careers and saddled with student debt, are absorbing a broader stack of simultaneous cost pressures, averaging 3.5 challenges among bridge millennials and 3.4 among millennials, compared with 2.6 for baby boomers and seniors.
Food costs clearly illustrate this shift. Financial stress when buying groceries rose five percentage points overall to 89% of all consumers in January from 84% last October, with double-digit increases among bridge millennials (10 percentage points) and millennials (11 percentage points). Not just grocery shopping is straining pocketbooks. Financial stress from dining out and food delivery affected 47% of all consumers last month, up from 44% three months prior. Food inflation has moved beyond essentials into discretionary spending, compressing monthly cash flow across the full food spectrum.
Healthcare pressures are also compounding, but in distinct ways. Among boomers and seniors, rising strain in paying for doctors’ visits, treatments and medications reflects how these predictable, routine costs become more burdensome with age. For Gen Z, pressure is expanding into care access and out-of-pocket costs, with sharp increases in financial stress due to prescriptions, dental and vision treatments and mental health services (+11 percentage points). For both older and younger consumers, healthcare is becoming a recurring payment management problem, not a one-time billing issue.
Dealing with higher cost of living
Consumers are responding by doing more to cope, including reducing their daily spending, tapping credit, avoiding large purchases and using installment payment plans. But those strategies aren’t leaving them feeling in control. Half of consumers rely on two or three coping strategies, yet only 16% use four or more, revealing limited room to escalate further.
Younger consumers are more likely to seek out ways to manage their living costs; roughly one in five millennials, bridge millennials and Gen Zers deploy four or more strategies simultaneously, while one-quarter of baby boomers and seniors have taken no action at all. Crucially, deploying mitigation strategies no longer translates into confidence. From October 2025 to January 2026, the share of consumers who said their strategies were extremely or very effective fell from 34% to 25%.
These are just some of the findings detailed in “Generations Under Pressure: How Younger Consumers Are Coping With Higher Living Costs,” the newest installment of the PYMNTS Intelligence exclusive Generational Pulse Report series. This edition examines how persistent cost-of-living pressures across essential categories—including groceries, housing and healthcare—are driving generational differences in consumer coping strategies and declining confidence in achieving financial relief. It draws on insights from a survey of 2,747 U.S. adult consumers conducted from Jan. 2, 2026, to Jan. 5, 2026.
The Cost of Living
Over half of U.S. consumers cite daily living expenses as a challenge, unchanged since October.
Cost pressure remains widespread. In January, 51% of consumers said that managing their daily living costs was challenging, largely unchanged from October 2025 (50%).
Younger generations face a broader array of cost pressures. Bridge millennials average 3.5 cost pressures and millennials 3.4, compared with 2.6 among baby boomers and seniors.
While daily expenses are a universal concern, other increases in living costs, including housing, healthcare and family responsibilities, define financial stress for different generations.
While cost pressures touch nearly all consumers, the challenges that rise to the top vary sharply by generation. Daily expenses dominate for older consumers, but housing and saving for the future weigh most heavily on working-age households. For younger adults, family-related costs are a defining pressure.
Rising Food Costs
Nearly nine in 10 consumers cite financial stress when buying groceries, but strain with food costs goes beyond the grocery store.
The share of consumers citing strain in paying for groceries rose to 89% in January from 84% last October. This increase is driven almost entirely by younger cohorts: Bridge millennials jumped 10 percentage points over that period to 88%, millennials rose 11 percentage points to 90% and Gen Z increased nine percentage points to 80%. Baby boomers and seniors were fixed at 94%, indicating almost no further room for escalation. Food inflation has fully migrated into the budgets of working-age households, tightening monthly cash flow for millions of consumers.
Food-related financial pressure doesn’t appear just at the grocery store. The share of consumers citing the costs of dining out and food delivery as a pocketbook challenge rose four percentage points to 47% over October 2025–January 2026, with a nine-point increase for boomers and seniors, bridge millennials and Gen Zers. This pattern may suggest that households are no longer substituting eating at home to manage grocery inflation. Instead, higher costs are showing up across the entire food spectrum, compounding consumers’ total food spending.
That in turn suggests that goods costs have become a structural, recurring cash-flow problem, not a discretionary budgeting issue. As spending on both essential groceries and discretionary dining out and food delivery rises simultaneously, it creates demand for short-cycle liquidity tools, real-time spend visibility and payment options that can help manage recurring food expenses, particularly for younger consumers with thinner financial buffers.
The Healthcare Cost Squeeze
Healthcare costs cluster at the generational edges, pressuring the oldest and youngest consumers the most.
Among baby boomers and seniors, healthcare-related cost pressure is intensifying through the accumulation of recurring expenses, not through episodic care. From October 2025 to January 2026, the share of consumers citing the cost of health insurance premiums as a challenge rose to 61% from 56%. Those citing strain from higher dental and vision costs spiked to 57% from 44%. For older consumers living on fixed or semi-fixed incomes, routine healthcare costs reduce monthly cash flow flexibility and heighten sensitivity to billing timing, payment structure and predictability.
For Gen Z, healthcare stress is widening beyond insurance premiums into services with higher out-of-pocket exposure and weaker coverage. The share of consumers citing the cost of prescription medications as a challenge spiked to 46% last month from 34% in October 2025. Forty-eight percent of consumers were stressed by dental and vision costs, up from 41% three months prior, and 44% reported feeling financially pressured by the cost of mental health services, compared to 33% last October. These shifts suggest that healthcare pressure for younger consumers is less about premium affordability and more about managing fragmented, recurring payments for essential care as they assume financial independence.
Overall, the strain points to older consumers’ need for tools that emphasize predictability, bill smoothing, and low-friction payment management for routine expenses. Younger consumers often have limited savings buffers and need flexible, transparent ways to manage ongoing healthcare payments across multiple providers. These dynamics point to a growing need for payment orchestration, installment structures, real-time cost visibility and integrated healthcare payment tools that align recurring medical expenses with how consumers receive and manage income.
Coping Strategies
Younger generations are making more effort to cope with the rising cost of living, while older cohorts rely on fewer levers.
The number of strategies consumers use to manage rising living costs reveals a clear generational divide. Overall, half of consumers rely on two to three coping strategies, while only 16% use four or more, potentially suggesting that most households are managing their financial stress through limited, incremental adjustments rather than through aggressive financial restructuring.
Older cohorts skew toward lower-intensity responses. One-quarter of baby boomers and seniors adopt no coping strategies, and just 8% employ four or more strategies, suggesting either greater insulation from rising costs or fewer viable options to escalate their responses. In practice, many older consumers appear to absorb cost increases through constrained spending, rather than through active financial maneuvering.
Younger generations tell a different story. Roughly one in five bridge millennials (23%), millennials (22%) and Gen Z consumers (21%) report using four or more strategies simultaneously. These consumers are stacking their behaviors—cutting spending, taking on additional work, borrowing informally and adjusting their savings—not because these actions are optional, but because no single lever is sufficient.
The key insight is not that younger consumers are more proactive, but that they are under greater pressure to do more just to stay even. High strategy intensity reflects limited financial slack, not resilience.
While consumers are universally dialing back their spending, younger generations are also tapping into credit.
Cutting back on spending has become the dominant response to rising living costs across all generations. In January, roughly 60% to 75% of consumers across all age groups reported reducing their everyday spending, and 44% to 60% said they were avoiding large purchases. Only 6% reported taking no action at all, underscoring how widespread cost-management behaviors have become.
But the mix of actions beyond basic cutbacks varies sharply by generation. Older consumers tend to concentrate their responses on spending restraint and avoidance. Among baby boomers and Gen Xers, large majorities cut back on everyday expenses and delay discretionary purchases, but relatively few turn to additional income sources, credit-based tools or financial support from family and friends.
Younger consumers, by contrast, are more likely to supplement their spending cuts with a wider range of behaviors. Millennials and bridge millennials are substantially more likely than older cohorts to take on additional work or income, negotiate bills, use credit or tap external support. Gen Z stands out for its especially high reliance on family or friends, buy now, pay later options and adjustments to saving behavior alongside spending cuts.
Taken together, these patterns show that while cutting back is now a shared starting point, generations differ in what they add on top of that behavior. Older consumers primarily manage rising costs through restraint, while younger consumers combine spending cuts with credit and support mechanisms. These differences in coping strategies help explain why generational stress is reflected not in whether consumers act, but in how.
Declining Financial Confidence
Doing more to manage financial stress from the rising cost of living is no longer making consumers feel more in control.
The perceived effectiveness of consumers’ cost-management strategies is deteriorating, regardless of how many coping actions they use. From October to January, consumer confidence in the effectiveness of their coping tools declined across the board, regardless of how intensely consumers deployed strategies. This indicates that across all strategies, rising costs are outpacing households’ perceptions of their ability to adapt.
At the complete sample level, the share of consumers who say their strategies are extremely or very effective fell to 25% in January from 34% in October. Importantly, this erosion is not limited to consumers doing little to manage costs. Even among those with a high-intensity coping approach—defined as using four or more strategies—perceived effectiveness plunged 15 percentage points, to 21%.
Medium-intensity copers, who rely on two to three strategies, saw their perceived effectiveness fall to 27% from 34%, while low-intensity copers experienced a similar drop, from 35% to 23%.
As traditional coping behaviors lose effectiveness, consumers are likely to seek external tools that improve short-term liquidity and provide clearer visibility into recurring expenses. The opportunity for financial services companies is not in encouraging households to do more, but in helping them do, on one level, less—by embedding smarter payment options, real-time insights and cash-flow support that restores a sense of control as everyday costs remain elevated.
Confidence is eroding across all generations, underscoring that the intensity with which consumers use financial coping strategies, rather than their age, is the key differentiator.
There is a clear disconnect between how much consumers are doing and how well those efforts are working. Overall, the share of consumers who say that their coping strategies are extremely or very effective dropped nine percentage points from October to January to 25%, signaling growing fatigue rather than adaptation.
While the erosion is visible across generations, it is most pronounced among working-age consumers. Millennials dropped to 32% from 47%, and bridge millennials slipped to 29% from 42% over just three months—even though they were among the most likely to stack multiple strategies. Even Gen Z, which maintains relatively higher confidence than older cohorts, declined to 35% from 41%.
By contrast, baby boomers and seniors reported consistently low effectiveness, reflecting their use of fewer strategies employed and limited room to adjust. Taken together, the data show that doing more is no longer translating into feeling in control, especially for younger consumers already pulling multiple levers at once.
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Methodology
“Generations Under Pressure: How Younger Consumers Are Coping With Higher Living Costs,” the newest installment of the Generational Pulse Report, a PYMNTS Intelligence exclusive series, is based on a survey of 2,747 U.S. adult consumers conducted from Jan. 2, 2026, to Jan. 5, 2026. This report examines how persistent cost-of-living pressures across essential categories, including groceries, housing and healthcare, are driving generational differences in consumer coping strategies and their declining confidence in achieving financial relief. Our sample was balanced to match the U.S. adult population by age, gender, education and income.
