Nearly Half of Gen Z Rely on Financial Help from Parents, Family: BofA Survey

A new poll from Bank of America finds that nearly half of Gen Z adults are relying on financial help from their parents and family members to get by.

The survey for the Bank of America Better Money Habits team found that 46% of Gen Z are getting financial assistance from parents or other family members, a figure that drops to 30% for Gen Z non-students.

Holly O’Neill, president of retail banking at Bank of America, told reporters on Tuesday that, “General Zs are coming out and becoming independent, so I think if I wanted to see progress in one category, it would to be… Z becomes more independent from family and friends.”

“Maybe I’m biased because I have three Gen Zs that I’m trying to get independent, but I think that’s a sign that they’re setting a budget and meeting that budget, so that’s an area that I’m going to I like to see some progress,” O’Neill said.

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In addition to 46% of Gen Z receiving financial support from their parents, another 3% said they are receiving help from friends while 9% said they are receiving funding from the government, meaning 54% of Gen Z are receiving some form of financial aid.

Of those who received financial assistance, 32% received $1,000 per month or more, while 44% received less than $500 per month. Non-student Gen Z respondents received smaller amounts, as only 22% said they are receiving more than $1,000 per month and 55% said they receive less than $500 per month.

Gen Z members who receive financial aid said they use the money to help pay for things like groceries and toiletries (57%), rent and utilities (53%), phone plans (53%) and health insurance payments (49%).

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The survey also found that more than half of Gen Z, 52%, do not earn enough money live the life they want because of the high cost of living. To cope with rising costs, 43% of Gen Z reported cutting back on dining out, 27% skipped events with friends, 24% switched to more affordable grocery stores and 21% started using a budget.

Over half of Gen Z, 54%, said they don’t pay for their own housing. Of the 46% who do, 64% reported that more than 30% of their monthly salary goes towards housing while 23% said that 51% or more of their salary goes towards housing. housing costs.

A 57% majority of Gen Z respondents said they don’t have enough emergency savings to cover three months of savings – in line with Bank of America’s findings of 56% in 2023 and 55% in 2022.

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“They’re also lagging some of what we would think are traditional indicators of financial progress,” O’Neill said. “So, 50% say they are not on the right track buy a house in the next five years, 46% say they won’t be able to save for retirement and 40% said they’re not on track to start investing.”

“Some of that is to be expected, these Gen Zs are 18 to 27 years old, so think about that age — if you’re 18, obviously in five years, buying a house can be difficult, O’Neill said. “But they’re taking active management of their financial lives, they’re delaying some of these things until they’re ready.”

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As for the actions Gen Z members looking to improve their financial situation should take, O’Neill offered three key steps to take.

“As we talk about putting ourselves on a path to financial health, these are three of those critical moments – managing our day-to-day expenses; making and keeping a budget; and then construction and managing your credit“, said O’Neill.