In recent years, finding disposable income has been harder for younger generations and older generations alike. According to the Equifax Market Pulse Index (MPI), every generation except for Baby Boomers is financially worse off in 2025 than they were in 2021. In fact, the national average was 61.4, lower than just 4 years ago in 2021.
This index works by analyzing both sides of a consumer’s balance sheet. For their liabilities, they analyze a consumer’s available credit, amount of debt, and overall credit history. On the other hand, they analyze a consumer’s income and assets as a whole. It also analyzes much broader economic trends, such as the impacts of student loans and wealth volatility. For example, spending on necessities and general items has increased by 23.4% and 31.6% since 2021, which helps to account for the decrease in MPI score.
Recently, the concern has been an increase in the number of delinquencies, especially with younger generations. Since April of 2019, young city families and singles have increased the percentage of severe delinquencies by 10% and 4% respectively. This inverts the trend of suburban families and singles, who fell during this same time period. This has significantly slashed the Market Pulse Index score for the younger generations, with Millennials and Gen Z seeing a respective decrease of 1.1 and 3.3. These decreases are nearly double and 5 times the national average decrease of 0.6.
A lot of the worsening financial state of these younger generations can be chalked up to the rampant wealth disparity. Gen Z and Millennials have a combined 17% of the US’s total assets and 28% of the total savings account assets. While this can seem damaging enough, the surface level analysis is deceiving. It is estimated that 5% of Generation Z households have 63% of the entire generation’s wealth. Assets specifically have the most shocking disparity as the affluent 5% have twice as much as the remaining 95%. While this 5% brings up the averages, the reality is that many Gen Z consumers don’t have enough to get by. For many Gen Z consumers, turning to a new line of credit is the only way to get by. In fact, it is estimated that the number of new credit accounts has doubled since just 4 years ago in 2021.
Aside from credit lines, the financial inequality has shifted consumer behavior most around the holiday season. To save on costs, consumers are planning their spending ahead for the holiday season. In fact, it’s estimated that 80% of all planned holiday gift spending is done by Cyber Monday. Most of it can be further condensed into the short window between Thanksgiving and Cyber Monday, where there are often the largest and most frequent sales.
Another habit is by taking advantage of Buy Now, Pay Later (BNPL) services. This service is as simple as it sounds, where the cost of a good is spread out over convenient installments. Consumers are using this service for vehicles, furniture, electronics, and even clothes. It is estimated that 67% of parents plan on using this service this holiday season and 43% of consumers say that having BNPL dictates where they’ll buy a good from.
Because of a worse financial state, Millennials and Gen Z shoppers are decreasing their planned holiday spending by 1% and 23% compared to 2024. Couple this with other factors like BNPL and you get a picture of how hard it will be for some to buy during the holidays. Despite this, there are some things that consumers will spend their money on regardless of circumstances.
For example, 43% of purchases during the holidays say that family gifts are something they must buy. Similarly, 35% said children’s gifts were non-negotiable and 28% say gifts relating to holiday traditions are also non-negotiable. For over 80% of consumers, cutting into essential spending like groceries in order to make up the difference and ensure there are gifts during the holidays. So do younger consumers have any other option to have money for both themselves and their families during this holiday season?
One impactful option is by getting financial advisors. Companies like Equifax offer advisors that not only help you manage your assets, but help forecast upcoming market trends and insights. They even offer a variety of ways to connect, with options for webinars or 1-on-1 advisory sessions. Ultimately, if you want to make sure you have enough money to spend this holiday season without cutting into your own funds, taking advantage of a financial advisor is the way to go.
Source: Equifax
