Inflation Hits Every Generation. But Not in the Same Place.

Inflation in the United States hit 3.8% in April, its highest in nearly three years.

The Iran war sent energy costs soaring 18% year over year. Gasoline has jumped more than 28%, and diesel has surged nearly 50% since the conflict began. Food-at-home prices are now projected to rise 3.2% in 2026, nearly double what forecasters expected at the start of the year. And 34% of large companies are already passing tariff and input costs to consumers.

But inflation doesn’t hit everyone in the Cutback Economy the same way. A PYMNTS Intelligence survey of 2,283 U.S. adults found that while daily living pressure varies just five points across generations, it spans 31 points within the baby boomer generation alone. The difference isn’t age. It’s how people manage their money.

The specific costs creating the most pain look different for every age group.

For Boomers: Groceries Are Eating Their Lunch (Budget)

Among baby boomers and seniors, groceries topped the list for just about everyone. The survey found that 94% of baby boomers who are Pressure-Driven Cutback Consumers and face daily living pressure flagged groceries as a problem, and Selective Cutback Consumers weren’t far behind at 90%. With diesel-driven shipping costs climbing and fertilizer prices spiking because of Strait of Hormuz disruptions, the grocery line in the budget is expanding fast on a largely fixed income.

Where the gap opens is one tier down. The survey revealed that 39% of Pressure-Driven boomers flagged clothing and personal care as a challenge, versus 20% of Selective Cutback boomers. That 19-point spread is the clearest sign of financial stress in this age group. It’s the spending that gets dropped when food and energy costs eat too much of a check that doesn’t grow.

But even here, the niceties survive. Among Pressure-Driven boomers under daily living pressure, 84% held onto entertainment, and 65% held onto dining out. The things that keep life interesting are the last to go.

For Gen X: It’s the Electric Bill, Not the Mortgage

Generation X is often talked about in the context of homeownership stress, but the data pointed somewhere more specific. Among Gen X Pressure-Driven Cutback Consumers who face a housing challenge, 81% flagged utilities, including electricity, gas, water and internet, as the pain point. Among Selective Cutback Consumers, that dropped to 57%.

The mortgage itself runs the other direction. Selective Cutback Consumers flagged rent and mortgage payments at a higher rate.

This matters right now. With natural gas prices elevated and electricity rates climbing alongside the broader energy shock, the cost of running a home, not paying it off, is what splits this generation. Gen X Pressure-Driven Consumers spanned a 27-point gap on housing challenges compared to Selective Cutback Consumers, and utilities were the wedge. The current fuel crisis is pushing it deeper every month.

For Millennials: Credit Cards, Not Student Loans

The familiar story about millennial financial stress centers on student debt. The data showed otherwise.

Among millennial Pressure-Driven Cutback Consumers who face a debt challenge, 75% flagged credit card payments as the specific problem. Among Selective Cutback Consumers with debt challenges, 60% did. Student loans run in the opposite direction, as Selective Cutback Consumers flagged them more.

The debt that’s splitting millennials apart isn’t the long-term kind the generation is known for. It’s high-rate, revolving and growing right now. It’s the credit card balance that climbed as grocery and gas bills went up and wages didn’t keep pace. With inflation running at 3.8% and wage growth at 3.6%, that gap is getting wider in real time. The study found that 42% of millennial Pressure-Driven Consumers saved less last quarter, compared to 18% of Selective Cutback Consumers.

For Gen Z: The Safety Net They Can’t Build

Generation Z’s dividing line isn’t about today’s bills. It’s about tomorrow.

Among Gen Z Pressure-Driven Cutback Consumers who face future planning pressure, 73% flagged building an emergency fund as the challenge, compared to 47% of Selective Cutback Consumers. Saving for retirement was 54% versus 34%.

Gen Z is the only generation in which increasing savings ranks as the second most common coping move, ahead of avoiding big purchases. They’re trying to build a floor, even under pressure. But they also borrow from family at 34%, the highest rate of any generation. In an environment where gas prices are up more than 40% year over year, and food costs are rising faster than expected, the safety net they need keeps moving further out of reach.

The Real Divide

Across all four generations, the pattern repeats. How people manage their money, not their age, income or ZIP code, is what best predicts which specific costs are creating stress. A baby boomer watching clothing drop out of the budget and a Gen Z worker watching credit card debt pile up as gas eats into take-home pay are both under pressure, but they need completely different help.

Across all four generations, consumers still protect the things that make life worth living. Entertainment and social spending survive even among the most financially pressed.

As the energy shock from the Iran war ripples into food, shipping and consumer goods, the useful question isn’t what generation someone belongs to. It’s what specific costs are breaking their budget, what they refuse to give up, and how to help them hold onto both.

Read more:

Cutting Back Isn’t Working: Why Doing More, Not Less, Is the Only Strategy That Helps

The Cutback Economy Spares Pets, Streaming and Dinner Out

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