Better Money Habits® Survey Indicates Younger
Americans are Delaying Milestones and Implementing Lifestyle
Changes to Adapt to Today's Economic Realities
CHARLOTTE, N.C., July 10,
2024 /PRNewswire/ -- Today, 46% of Gen Zers (ages
18-27) rely on financial assistance from parents and family,
according to new research from Bank of America America's Better Money Habits® financial
education team. In addition, 52% of those surveyed said they don't
make enough money to live the life they want and cite the cost of
living as a top barrier to financial success. Many 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.
To offset growing expenses, the study found that two-thirds
(67%) are implementing lifestyle changes such as cutting back on
dining out (43%), passing on events with friends (27%), and
shopping at more affordable grocery stores (24%). A recent Bank of
America Institute analysis further demonstrated these findings,
noting Gen Z and Millennials are "trading down" to combat rising
costs – this despite a strong labor market over the last few
years.
Watch a video message from Holly
O'Neill, President of Retail Banking
"Though faced with obstacles driven by the cost of living,
younger Americans are showing discipline and foresight in their
saving and spending patterns," said Holly O'Neill, President of Retail Banking at
Bank of America. "It is critical that we continue to empower
Gen Z to work toward achieving financial health and meeting their
long-term goals."
Getting Support and Saying No
Despite their greater
discipline, amidst today's high cost of living, Gen Z remains
financially dependent on others. Over half (54%) don't pay for
their own housing. Of those who do (46%), nearly two-thirds (64%)
report spending over 30% of their monthly paycheck on housing, and
two-in-10 report contributing over 51% of their monthly paycheck to
housing.
The new Better Money Habits research found that "loud budgeting"
– being vocal with friends about what social outings they can and
cannot afford – has helped Gen Z live within their means. More than
one-third (38%) feel comfortable declining social opportunities and
admitting it is because they can't afford the expense. Similarly,
63% do not feel pressured by friends to overspend, indicating that
Gen Z may be drawing firmer financial boundaries compared to other
generations at the same age.
Saving Struggles
Gen Z continue to struggle with
building savings and contributing to their retirement.
- Over half (57%) of respondents do not have enough emergency
savings to cover three months of expenses.
- Nearly one-third (30%) feel they don't make enough money to
save.
- Only 15% of Gen Z put a set percentage of their paycheck into a
savings account each month. Just 1 in 5 contribute to a 401(k) plan
or retirement account.
Additional Insights from the Survey:
- Most Gen Z respondents shared that they feel equipped to handle
financial basics, such as managing their day-to-day expenses (70%),
sticking to a budget (70%) and building/managing credit (66%).
- The vast majority (82%) of Gen Z have financial goals, and over
half (51%) are prioritizing them.
- Gen Z continues to use their leftover income on experiential
spending like dining out (36%), shopping (30%) and entertainment
(24%) – higher than other generations.
- 61% of Gen Z women said the high cost of living is a barrier to
financial success, vs. 44% of men.
For more details, please see the full report (PDF).
Methodology
This survey was conducted April 17 – May 3,
2024, by Ipsos in both 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. This survey was conducted primarily
using the Ipsos KnowledgePanel®, the largest and most
well-established online probability-based panel that is
representative of the adult US population. The margin of sampling
error for the general population sample is +/- 3.1 percentage
points at the 95 percent confidence level.
Better Money Habits
At Bank of America, we're
committed to helping people lead better financial lives by
equipping them with the skills, knowledge and confidence to
succeed. That's why we created Better Money Habits, a financial
education platform of tools and information that helps people make
sense of their money and take action to improve. As a cornerstone
of Better Money Habits, we offer free financial education content
and tools that break down financial topics in a way that's
approachable and easy to understand. We continually look for ways
to expand the reach of Better Money Habits and also offer Spanish
language resources on the site.
Bank of America
Bank of America is one of the world's
leading financial institutions, serving individual consumers, small
and middle-market businesses and large corporations with a full
range of banking, investing, asset management and other financial
and risk management products and services. The company provides
unmatched convenience in the United
States, serving approximately 69 million consumer and small
business clients with approximately 3,800 retail financial centers,
approximately 15,000 ATMs (automated teller machines) and
award-winning digital banking with approximately 57 million
verified digital users. Bank of America is a global leader in
wealth management, corporate and investment banking and trading
across a broad range of asset classes, serving corporations,
governments, institutions and individuals around the world. Bank of
America offers industry-leading support to approximately 4 million
small business households through a suite of innovative,
easy-to-use online products and services. The company serves
clients through operations across the
United States, its territories and more than 35 countries.
Bank of America Corporation stock (NYSE: BAC) is listed on the New
York Stock Exchange.
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Reporters may contact:
Susan Atran, Bank of America
Phone: 1.646.599.3300
susan.atran@bofa.com
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