A study by Bank of America titled Better Money Habits examined the financial attitudes and behaviors of adult Gen Zers, revealing several insights into their unique approach to money.
Among the most revealing takes, researchers found that almost 1 in 2 Gen Zers (46%) relay on financial assistance from their parents and family members. Additionally, 52% of respondents indicated that they do not earn enough to live the "life they desire," citing the cost of living as a primary barrier to achieving financial success.
Many also said they are delaying milestones and are not on track to buy a home (50%), save for retirement (46%), or start investing (40%) within the next five years – even though they are working toward those goals.
The study also provided hot takes on Latino Gen Zers, a group that is almost twice as likely (26%) to re-prioritize its finances compared to non-Latino peers (14%).
In response to financial pressures, 67% of Latino respondents are making lifestyle changes, such as reducing dining out (43%), postponing events with friends (27%), and shopping at cheaper supermarkets (24%).
What's more, Latino Gen Zers' top priorities for the next year include advancing their careers or increasing their salaries (33%) and finding new jobs (33%), while another 33% of respondents have started budgeting and have stopped attending events with friends due to the rising cost of living.
When it comes to describing the biggest obstacles to achieving success in today's economy, the demographic points to the high cost of living (54%), not enough income to achieve financial goals (39%) and the economy/economic outlook (36%); consistent with findings from the general Gen Z population.
Holly O'Neill, President of Retail Banking at Bank of America, noted that despite the challenges 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," explained O'Neill.
However, Generation Z still relies heavily on financial support from others, with 54% not paying for their own housing. Among the 46% who do pay for their housing, 64% reported spending more than 30% of their monthly income on housing costs. Surprisingly, 2 in 10 respondents who pay for housing contribute more than 51% of their monthly salary to housing expenses.
Other significant findings from the study include that 57% of respondents do not have enough emergency savings to cover three months of expenses, and 30% feel they do not earn enough to save. Only 15% of Generation Z deposits a fixed percentage of their salary into a savings account each month, and only 1 in 5 contributes to a 401(k) or retirement account.
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