Nearly half of Gen Z is financially dependent on parents and family

46% of Gen Z is receiving financial support from parents or other family members - Photo: Fashion United

A survey by Bank of America’s Better Money Habits team found that 46% of Gen Zers in the US are receiving financial support from their parents or other family members. That number drops to 30% for Gen Zers who are not students.

54% of Gen Z receive some form of financial assistance

“Gen Z is coming of age and becoming independent,” says Holly O’Neill, president of retail banking at Bank of America. “So if I want to see Gen Z progress, it’s to see them become more independent from family and friends.”

"Maybe I'm a little biased, because I have three Gen Z kids around me and I'm trying to help them become more independent. They're budgeting and living within that budget. So that's where I want to see progress," O'Neill shared.

In addition to the 46% of Gen Zers who receive financial support from their parents, more than 3% say they are receiving help from friends, while 9% receive government assistance. This means that 54% of Gen Zers are receiving some form of financial support.

Of these, 32% receive $1,000 or more per month, and 44% receive less than $500 per month. Non-student Gen Zers receive less financial aid. Only 22% receive more than $1,000 per month, and 55% receive less than $500 per month.

Gen Zers who receive financial assistance say they use the money to pay for things like groceries and toiletries (57%), rent and utilities (53%), phone plans (53%), and health insurance premiums (49%).

Dependent because of lack of money to cover expenses

The survey found that more than half of Gen Z, 52%, don't earn enough money to afford the lifestyle they want because of the high cost of living.

To cope with rising costs, 43% of Gen Zers have cut back on eating out, 27% have skipped events with friends, 24% have turned to more affordable grocery stores, and 21% have started budgeting.

Fifty-four percent of Gen Z say they don’t pay rent. Of the 46 percent who do, 64 percent say more than 30 percent of their monthly income goes toward housing costs, while 23 percent say they spend 51 percent or more of their income on housing costs.

The vast majority, 57% of Gen Z respondents, said they don't have enough emergency funds to cover three months of expenses — matching Bank of America's findings, with 56% saying the same in 2023 and 55% saying the same in 2022.

“They’re also delaying some of the things that we think are traditional signs of financial progress ,” O’Neill shared.

“So 50% said they were not on track to buy a home in the next five years, 46% would not be able to save for retirement, and 40% shared they were not on track to start investing.”

“Some things are predictable. These Gen Zers are 18 to 27 years old, so think about that age — if you’re 18, obviously in five years, buying a home is going to be an effort,” O’Neill says. “But they’re actively managing their financial lives, putting some of this off until they’re ready.”

As for what actions Gen Zers looking to improve their financial situation should take, O'Neill recommends three main steps.

“When it comes to putting yourself on the path to financial wellness, three key milestones include managing your day-to-day spending; creating and sticking to a budget; and then building and managing your credit,” says O’Neill.

Source: https://tuoitre.vn/gan-mot-nua-gen-z-phu-thuoc-tai-chinh-vao-bo-me-gia-dinh-20240713161419856.htm