Nearly Half of Adult Gen-Z Parents Are Financing Their Lifestyles, According To A Study From Bank Of America

At least they are doing something about it.....

A new study from Bank of America revealed almost half of Gen Z are receiving financial assistance from their parents.

The study from Bank of America’s Better Money Habits financial education team, called “The State of Gen Z’s Financial Health,” released on Jul. 10, found that 46% of Gen Zers, ranging between ages 18 and 27, still rely on their parents for financial help due to not making enough money and blame the rising cost of living. The Better Money Habits research team found that 52% of survey participants admit to not making enough money to sustain their lifestyles, and many are putting off major milestone achievements. More than half of the survey participants claim to not have enough emergency savings to cover three months of expenses.

While some say they are working towards them, 50% say they aren’t saving to become homeowners, 46% don’t have retirement savings, and 40% aren’t on track to begin investing. However, some are adapting different changes to offset inflation.

Forty-three percent are cutting back on eating out, and 24% now shop at more affordable grocery stores. Twenty-seven percent are forgoing events with friends in a new trend called “loud budgeting,” which involves being vocal with friends about which events they can and cannot afford.

Banking analysts call this strategy “trading down” on fighting rising costs, something that more Gen Z and millennials are doing in hopes of gaining financial freedom. “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’s President of Retail Banking, Holly O’Neill, said.

“It is critical that we continue to empower Gen Z to work toward achieving financial health and meeting their long-term goals.”

The road to financial freedom is taking a toll on the bank of Mom and Dad. Fifty-four percent of adult Gen Zers still live at home and don’t pay for their housing. Of the 46% that do, close to two-thirds admit to spending over 30% of their monthly paycheck on housing. Two-in-10 report that more than 51% of their monthly paycheck goes towards housing costs.

According to The New York Post, “loud budgeting” has been effective for late teens and 20-somethings who struggle to be strict about financial boundaries. It is also helping them create healthy boundaries with their friend groups, as 63% no longer feel pressured by friends to overspend.

Most Gen Z respondents said they feel prepared to tackle financial basics thanks to some lifestyle changes. Seventy percent now stick to a budget and 66% are working towards better credit management.