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Gen Z (ages 18-28) draws a lot of scrutiny, some of it warranted, much of it not. When it comes to finances, this age group, particularly those that are in the workforce, deserve some latitude due to the confluence of factors – mostly negative – they’re contending with.
Gen Zers (and other folks as well) aren’t just dealing with a tough job market or stagnant wage growth or student loan debt or unapproachable housing prices. They’re grappling with all of those issues. They’re also earning their financial battle stripes at early ages and if they’re a bit ornery about it, that’s understandable. To their credit, many aren’t taking trying financial circumstance lying down.
Many Gen Zers and millennials aren’t relying windfalls or for their employers to suddenly lavish improved compensation upon them. Rather, they’re being proactive on a variety of financial fronts, including investing, reducing debt and seeking more financial education.
Interestingly, Bank of America’s 2025 Better Money Habits study reveals some trends among young people indicating that when it comes to money, Gen Z (and some millennials) is breaking from some of the financial norms established by older generations and that’s a good thing.
The Kids Are Gonna Be Alright
Well, hopefully. At a minimum, young people appear cognizant of the financial challenges they’re facing and they’re doing something about it. Acknowledge and action are always important starting points.
“Gen Z is challenging the stereotype when it comes to young people and their finances,” said Holly O’Neill, president of Consumer, Retail and Preferred Banking at Bank of America. “Even though they’re facing economic barriers and high everyday costs, they are working hard to become financially independent and take control of their money.”
The Bank of America survey says that for the 12 months included in the study (it was released July 30), more than half of Gen Zers boosted savings while nearly a quarter allocated more cash to reducing debt. Two-thirds are also looking for ways to lower expenses, including fewer dinners out and an increased focus on trimming grocery expenses.
There’s more good news. While many younger people are still “borrowing” from the Bank of Mom & Dad, the percentage doing so is decreasing, confirming progress.
“While 39% receive financial support from parents and other family members, this is down from 46% a year ago. And they are getting less money – 22% receive $1,000 or more per month compared to 32% a year ago, and 54% receive less than $500 per month compared to 44% a year ago,” according to BofA.
Income Issues Confound Gen Z
In an ideal world, Gen Z (and the rest of us) would get substantial raises because it’d be good for the economy and retirement savings, among other things. Plus, wage growth has not been impressive in recent years.
Lack of income is a broader, lengthy conversation, but breaking it down to fit in the confines of this piece, it’s safe to say Gen Z, by no fault of their own, doesn’t make enough, confirming they’re doing more with less when it comes to investing and paring debt. Hopefully, their personal earnings soon increase because they’re stressed out about it.
“While Gen Z knows that saving for the future is important, they struggle to do so, with close to half (43%) saying they are not on track to actively save for retirement in the next five years, though they’d like to be,” concludes BofA. “Many see saving for retirement and investing as symbols of financial independence (42% and 35% respectively). However, only a quarter (25%) contributed to a retirement account in the last year and one-in-five (21%) invested in the stock market, up slightly from recent years.”