The Backpack Economy: Millennials will spend nearly $400 on back-to-school 

 Key takeaways

• Millennials are spending big: Average back-to-school spend reaches $394 for Millennials (and $188 for all adults, on average).
• Learning curve: Half (50%) say back-to-school shopping is more expensive this year due to inflation and rising prices (57% Gen Z, 61% Millennials). Over a third (35%) say they are spending more on back-to-school this year than last (45% Gen Z, 48% Millennials).
• Stress test: One third of Americans (31%) are stressed about back-to-school spending, rising to 43% for Millennials and Gen Z.
• T for tariffs: 39% say tariffs have made back-to-school supplies more expensive.
• Early birds: 34% of shoppers are starting earlier to spread out costs; 48% of Millennials set aside money just for school spending.
• BNPL goes back-to-school: 1 in 5 Millennials (19%) are turning to buy now, pay later services to manage costs—more than any other age group.
• Influenced: Price (74%) over quality (56%) or brand preference (30%) has the most influence on back-to-school shopping decisions.
• ABCs of AI: 1 in 5 (20%) people and 30% of Millennials have used AI to find back-to-school discounts, and 18% used it to build shopping lists (27% Millennials)—ushering in a new era of tech-assisted budgeting. 

Stress hits hardest for younger generations

Nearly 1 in 3 Americans (31%) report feeling stressed about back-to-school expenses this year, according to new research from Empower. That number climbs sharply among Millennials and Gen Z, where nearly half (43%) say the season comes with financial anxiety.  

Half of Americans say back-to-school shopping is more expensive than it was last year due to inflation and rising prices (50%). Nearly 4 in 10 (39%) cite tariffs as a factor making supplies more expensive. 

Swiping smart: how families are paying for back-to-school

More than a third of respondents report they’re spending more this year than last year (35%). Americans say they are spending $188 on back-to-school supplies this season, with younger generations spending the bulk:

• Millennials: $394
• Gen Z: $276
• Gen X: $178
• Boomers: $34 

To fund these costs, families are turning to a mix of payment strategies:

• 37% use debit cards or checking accounts
• 23% rely on credit cards
• 15% dip into personal savings
• 7% turn to friends or family
• 5% opt for buy now, pay later (BNPL) options 

One in 5 Millennials say they use BNPL to pay for back-to-school costs (19%).  

Early shoppers 

Many are getting a head start: 34% of Americans shop for back-to-school items earlier than they used in order to spread out costs over time (42% Gen Z, 45% Millennials). Nearly 1 in 5 shop in July (16%), with 22% continuing into August. 

A third of Americans (34%) have set aside specific savings for back-to-school expenses, a habit more common among younger generations (46% Gen Z; 48% Millennials). 

Cutting back to gear up

To make room in their budgets, Americans—especially younger ones—are trimming elsewhere:

• 42% of Millennials are cutting back in other areas to afford school expenses
• 51% of Americans say even small purchases now feel like big decisions 

What’s in the bag?

Back-to-school spending isn’t just about notebooks and pencils anymore. Here’s where the dollars are going:

• School supplies (notebooks, backpacks, etc.): 42%
• Clothing and shoes: 41%
• Technology: 20%
• Transportation (bus passes, gas): 17%
• Extracurriculars (sports, clubs): 13%

• Childcare/afterschool programs: 7% 

   

Deals, discounts, and digital help

In a world where every dollar counts, 74% of shoppers say price and discounts top their decision-making list, followed by quality (56%), brand (30%), and loyalty rewards (26%). More than 4 in 10 (43%) Americans say they wait for a sale or discount before purchasing—especially Gen Z (54%) and Millennials (52%). 

Tech-savvy shoppers are even turning to artificial intelligence:

• 30% of Millennials have used AI to track down the best deals
• 27% have used AI to build their school shopping lists 

Methodology:

Empower’s “Backpack Economy” study is based on online survey responses from 2,201 Americans ages 18+ from June 29 - 31, 2025. The survey is weighted to be nationally representative of U.S. adults.