The outcomes of the recent Bank of America study have illuminated the financial difficulties experienced by a sizeable proportion of Generation Z. Nearly half of adult Gen Zers, aged 18 to 27, continue to depend on financial assistance from their parents. The study, released on Wednesday, has brought to light that 46% of Gen Zers have acknowledged receiving some form of financial aid from their families, while 52% have voiced that their current income is insufficient to maintain the lifestyle they aspire to.
The findings have further indicated that many adult Gen Zers hold concerns about their financial prospects. Fifty percent of respondents have expressed apprehensions about being able to purchase a home, and 46% have admitted that they are not setting aside enough funds for retirement. The primary impediment to achieving financial security, according to the survey, is the high cost of living, with two-thirds of respondents stating that they have had to curtail their expenses in order to save money. This includes 43% of respondents reducing their dining out frequency and 24% opting for more economical grocery choices.
One of the most notable revelations from the study is that 54% of adult Gen Zers surveyed do not bear the responsibility of paying for their own housing. Instead, they either live with their parents or receive financial assistance to cover their rent. It’s important to note that many individuals in this group are still pursuing their education, which accounts for this trend.
Equally alarming is the fact that 57% of respondents have disclosed that they do not have enough savings set aside to cover three months of expenses in the event of an emergency. This lack of financial preparedness exacerbates the challenges faced by Gen Z in attaining independence and stability.
In response to the survey results, Holly O’Neill, the President of Retail Banking at Bank of America, has underscored the necessity of empowering Gen Z to strive towards achieving financial well-being and meeting their long-term objectives. O’Neill has acknowledged the financial obstacles driven by the cost of living and has commended the discipline and forward thinking exhibited by younger Americans in their saving and spending habits.
Meanwhile, a separate study by TransUnion has further highlighted the financial discrepancies experienced by Gen Z. It has been revealed that as of the fourth quarter of 2023, Gen Zers aged 22 to 24 had an average income of $45,493. This figure pales in comparison to the $51,825 average income that millennials were earning at the same ages a decade ago, when adjusted for inflation.
The findings of these studies underscore the financial challenges experienced by Gen Z, and it is imperative that measures are taken to support this generation in overcoming these barriers and working towards financial independence and stability.