Gen Z, individuals born between 1997 and 2012, are demonstrating a trend of financial dependence on their parents and relatives, according to a survey conducted by Bank of America. The survey revealed that nearly half (46%) of Gen Z individuals are still relying on financial assistance, with 52% stating they do not earn enough to afford the lifestyle they desire due to escalating living costs. As a result, 54% of them are unable to afford housing.
For those Gen Z individuals who are financially independent, a significant portion (64%) spends more than a third of their monthly income on rent or mortgage payments, and 20% spend more than half of their monthly income on housing expenses. In an effort to manage their finances, 67% of the survey respondents have altered their spending habits, with 43% reducing their dining out expenses, 27% foregoing social events with friends, and 24% shopping at more affordable grocery stores.
Despite these efforts, the survey indicates that Gen Z individuals do not anticipate achieving significant financial milestones in the near future. Within the next five years, only half (50%) expect to be ready to buy a home, 46% do not foresee being able to save for retirement, and 40% do not plan to start investing.
Holly O’Neill, president of retail banking at Bank of America, commented on the findings, stating, “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.”
Reports suggest that Gen Z and millennials feel that achieving financial wealth is more challenging than it was for their parents’ generation. However, other studies also indicate that Gen Z is wealthier than previous generations were at their age. Factors contributing to this include their expectations for higher salaries and a different perception of the middle class. Despite this, Gen Z’s net worth is the lowest among all generations, in part due to their age and the rising costs of living.
