A new study by Bank of America titled “Better Money Habits 2024 Gen Z Report,” examines the financial attitudes and consumer behaviors of Generation Z adults. The report surveyed more than 1,000 U.S. adults aged 18 to 27, with more than 250 people identifying as Black/African Americans, more than 250 people identifying as Hispanic/Latino and more than 580 women respondents.
One major takeaway the report’s authors found is that the continued high cost of living is a major point of contention in Gen Z’s ability to afford their desired lifestyles. More than half of Gen Z respondents (52 percent) reported that their salaries don’t align with their preferred lifestyle and cost of living remains the main financial challenge the generation faces.
More than a third of Gen Z surveyed said “they don’t make good money,” which they describe as covering the nonessential spending they want to do. And when comparing themselves to their parents, 32 percent of Gen Z said they are behind where their parents were at the same time when it comes to their financial goals.
A key finding Gen Z’s dependency on external financial support. Fifty-four percent of Gen Z reported receiving financial assistance citing parents or other family members as the top sources.
Nearly a third (32 percent) of Gen Z said they receive $1,000 per month or more and 44 percent get less than $500 per month. The top areas of consumer spending for this financial assistance include groceries and toiletries (57 percent), rent or utilities (53 percent), smartphone service provider (53 percent) and health insurance/payments (49 percent).
To adapt to a life change caused by the current state of the economy, a majority of Gen Z feels able to handle financial basics such as managing day-to-day expenses (70 percent), sticking to a budget (70 percent) and building and managing their credit appropriately (66 percent). To counteract the growing list of exorbitant expenses, 67 percent of Gen Z has now turned to making lifestyle changes via cutting back on dining out (43 percent), not attending events with friends (27 percent), shopping at more affordable grocery stores and implementing a budget (21 percent).
In contrast to earlier WWD reports of Gen Z feeling pressured to spend beyond their means with friends and is losing friends because of overspending, the Bank of America survey found that 63 percent of Gen Z reported that they don’t feel pressured by their friends to spend beyond their means. Moreover, 38 percent of Gen Z reported that they are comfortable declining social meetups and are transparent in their inability to attend because of affordability reasons.
“The good news is that the vast majority (82 percent) of Gen Z have actual financial goals and more than half of them are prioritizing those goals,” said Holly O’Neill, president of retail banking at Bank of America. “Gen Z is taking active management of their financial life and delaying milestones like marriage and home buying until they’re ready. When I talk to young people, the first thing I tell them to do is set a budget and stick with it.”
