The rising cost of living is taking a toll on Gen Z, with a new survey finding that nearly half of Gen Z adults receive financial help from their parents or other family members.
Nearly half (46%) of Gen Z adults ages 18 to 27 say they rely on financial help from their parents or other family members, according to Bank of America’s “The Parent Trap” survey released last week. The Ipsos poll surveyed more than 1,090 Gen Z adults between April 17 and May 3.
The findings are similar to those of an online survey conducted in September, which found two-thirds (65%) of Gen Zers and 74% of millennials said they believe they are falling further behind financially. The online survey was conducted exclusively for USA Today by Harris Poll.
But roughly six in 10 Gen Zers (58%) said they were optimistic about their financial future heading into 2024, according to a Bankrate poll released in December.
Either way, Gen Z is less likely than other generations to save money or put aside funds for retirement, according to a separate Bankrate survey conducted in September.
A person taps their debit card on a card terminal to make a purchase.
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Financial issues cause Gen Z to cut spending
More than half (54%) of Gen Z respondents to the Bank of America survey said they don’t pay their own housing costs, and to make up for living expenses, many are cutting back on dining out (43%), canceling events with friends (27%) and shopping at more affordable grocery stores (24%).
More Gen Z women (61%) than men (44%) surveyed said the high cost of living is an obstacle to their financial success. “Despite facing obstacles due to the cost of living, younger Americans are demonstrating discipline and foresight in their savings and spending patterns,” Holly O’Neill, president of retail banking at Bank of America, said in a news release. “It’s important we continue to help Gen Z achieve financial wellness and reach their long-term goals.”
Generation Z and Economic Dependency
According to a Bank of America survey, the cost of living is the “biggest barrier to financial success” for Gen Z, with more than half (52%) saying they don’t earn enough to live the life they want. Financial difficulties have led many surveyed to say that despite working toward their goals, they:
Not having enough emergency savings to cover three months of expenses (57%)
No plans to buy a home (50%)
Unable to save for retirement (46%)
Unable to start investing (40%)
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The story continues
What is Gen Z’s “loud budgeting”?
To stay within budget, many Gen Zers engage in “out loud budgeting,” telling friends which social events they can and can’t spend on, according to Bank of America.
63% of survey respondents said they don’t feel pressured by their friends to overspend.
More than a third (38%) of respondents are comfortable turning down social opportunities and admitting they can’t afford the cost.
They still spend their remaining income on dining out (36%), shopping (30%) and entertainment (24%), higher than other generations, according to Bank of America.
Gen Z women surveyed were more likely than men to cut back on unnecessary expenses, such as skipping dining out (50% of women vs. 37% of men) and attending events with friends (31% of women vs. 24% of men).
“With the cost of living remaining high, Gen Z feels they can manage the basics and are taking steps to cut back on unnecessary expenses and avoid pressure to overspend,” Bank of America said in the report.
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This article originally appeared on USA TODAY: Survey finds Gen Z is caught in ‘parent trap’ and in need of financial help
