iStockphoto / Alessandro Biascioli
A new financial report from Bank of America has shed light on just how badly the economy is for Gen Z compared to other generations.
While the new report doesn’t dive into the underlying causes Gen Z is struggling, of which there are many and some are blatantly obvious, the report does dive into the money habits of Gen Z and how much of the generation is being held back from traditional American milestones like moving out of their parent’s homes.
Gen Z Financial Report Findings
Those traditional milestones of living on your own and accumulating savings, well, it’s not going great for Gen Z. Here’s an overview of the findings from BofA:
- 54% of Gen Z don’t pay for their own housing and rely on others for assistance
- Of the 46% that do pay for their own housing, nearly two thirds spend 30% of monthly earnings on rent and 20% spend 51% of their monthly paycheck on rent
- 52% of those surveyed said they are unable to earn enough money to live the life they want due primarily to Cost of Living
- 50% said they are not on track to buy a home at any point
- 46% said they are unable to save for retirement
- 40% responded that they are unable to start investing their savings within the next 5 years
- 43% cut back on eating out to offset growing expenses
- 27% pass on events with friends because of high cost of living
- 57% do not have enough savings to cover 3 months of expenses in case of an emergency
Meanwhile, according to the Bank of America study, 82% of Gen Z responded that they do have financial goals and 51% are prioritizing them despite being unable to get ahead. While 70% said they are equipped to manage their day-to-day expenses and stick to a budget but when there isn’t enough money coming in those skills are rendered useless.
What can be done about this? Well, a lot. I’m not the person to get into that here. However, for anyone playing the long-term game there is reason to be optimistic. The largest wealth transfer in history, $72.6 trillion, from Boomers to Gen X, Millennials, and Gen Z (in that order) is set to take place over the next 20 years.