As the cost of living continues to rise, 46% of consumers ages 18 to 27 rely on parents or family members for financial support, according to a Bank of America survey.
The Better Money Habits report found that 54% of Gen Z consumers rely on others to help them pay their housing costs, meaning they remain financially dependent.
This financial hardship has also caused them to delay important financial milestones in their lives.
For example, 50% of consumers aren’t ready to buy a home, 46% haven’t saved enough for retirement, and 40% aren’t on track and won’t start investing in the next five years.
This financial uncertainty has Gen Z consumers struggling to set aside savings and prepare for retirement, with 30% reporting that they feel they don’t earn enough to save.
As a result, 57% of people don’t have enough emergency savings to cover three months’ worth of expenses, only 15% put aside a portion of their paycheck each month, and only one in five contributes to a 401(k) plan.
To manage rising costs, 67% are making lifestyle adjustments such as eating out less (42%), avoiding social events (27%) and shopping at more affordable grocery stores (24%).
“Loud budgets,” in which consumers openly discuss what social activities they can and can’t afford, are also helping Gen Z live within their means.
According to the report, 38% of consumers are comfortable turning down social opportunities, openly admitting that it is because they cannot afford the cost.
Similarly, 63% don’t feel pressured by friends to overspend, suggesting Gen Z may have stricter financial boundaries compared to others their age.
“Despite facing obstacles from the rising cost of living, younger generations of Americans are demonstrating discipline and foresight in their savings and spending patterns,” said Holly O’Neill, president of retail banking at Bank of America.
“It’s important that we continue to help Gen Z achieve financial wellness and reach their long-term goals.”
