Nearly Half of Gen Z Rely on Others For Financial Support

Amidst the ongoing increased cost of living, 46% of consumers aged between 18 and 27 depend on financial support from their parents and families, according to Bank of America research.

The Better Money Habits report found that 54% of Gen Z consumers remain financially dependent on others by relying on them to pay for their housing.

This financial struggle has also caused them to delay significant financial milestones in their life.

For example, 50% of consumers are not prepared to buy a home, 46% are not saving adequately for retirement and 40% are not on track so start investing within the next five years.

This financial insecurity has also caused Gen Z consumers to struggle to build savings and prepare for their retirement, with 30% reporting they feel they lack sufficient income to save.

As a result, 57% lack enough emergency savings for three months of expenses, only 15% allocate a portion of their paycheck to savings each month and just one in five contribute to a 401(k) plan.

To manage rising costs, 67% are making lifestyle adjustments such as cutting back on dining out (42%), skipping social events (27%) and shopping at more affordable grocery stores (24%).

Loud budgeting, where consumers openly discuss what social activities they can and cannot afford, is also helping Gen Z live within their means.

The report revealed 38% of consumers feel comfortable declining social opportunities and openly admitting it is because they can’t afford the expense.

Similarly, 63% do not feel pressured by friends to overspend, which indicated that Gen Z may be drawing firmer financial boundaries compared to other generations at the same age.

Holly O’Neil, president of retail banking at Bank of America, said: “Though faced with obstacles driven by the cost of living, younger Americans are showing discipline and foresight in their saving and spending patterns.

“It is critical that we continue to empower Gen Z to work toward achieving financial health and meeting their long-term goals.”