PROVIDENCE – Today, 46% of Generation Z members (age 18-27) rely on financial assistance from parents and family, according to Bank of America Corp.’s recent Better Money Habits Survey.
More than half of respondents (52%) cited the cost of living as a barrier to financial success – including 61% of women and 44% of men – and said they don’t make enough money to live the life they want. Half of respondents said they are not on track to buy a home within the next five years, while 46% said they are not on track to save for retirement and 40% said they are not on track to start investing within that time.
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The survey was conducted from April 17 to May 3 by Ipsos in English and Spanish and is based on nationally representative probability samples of 1,097 general population adults (age 18 or older) and a partially overlapping sample of 1,091 Gen Z adults (age 18-27), including 37 Gen Z adults from a non-probability sample.
Additionally, 54% of respondents said they don’t pay for their own housing, while nearly two-thirds of those who do reported spending more than 30% of their monthly paycheck on housing and 2 in 10 said they contribute more than 51% of their monthly pay to housing.
The study also found that 67% of respondents said they are implementing lifestyle changes to offset growing expenses, including cutting back on dining out (43%), passing on events with friends (27%) and shopping at more-affordable grocery stores (24%).
“Though faced with obstacles driven by the cost of living, younger Americans are showing discipline and foresight in their saving and spending patterns,” Bank of America President of Retail Banking Holly O’Neill said in a statement. “It is critical that we continue to empower Gen Z to work toward achieving financial health and meeting their long-term goals.”
Despite these decisions to cut back, Gen Z members continue to struggle with building savings and contributing to retirement, the study found.
Fifty-seven percent of respondents said they do not have enough emergency savings to cover three months of expenses, while 30% said they don’t make enough money to save, 15% put a percentage of their paycheck into a savings account each month, and only 1 in 5 contribute to a 401(k) plan or retirement account.
