Millennials will spend nearly $400 on back-to-school, according to new research

With pencils sharpened and backpacks zipped, American families head back to school facing rising prices. New Empower research finds that 50% of Americans say back-to-school shopping is more expensive this year due to inflation and 31% report feeling stressed about these expenses.

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.

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 to 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

Visit The Currency™ to read Empower's full research report, "The Backpack Economy."

Methodology:

Empower's "Backpack Economy" study is based on online survey responses from 2,201 Americans ages 18+ fielded by a third-party panel provider from June 29 - 31, 2025. The survey is weighted to be nationally representative of U.S. adults.