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73% of Gen Z Say Economic Environment Has Made it More Challenging to Save; 75% Seeking Ways to Earn Additional Income

Challenging to Save

As Gen Z looks to establish their financial footing, the economic environment and inflation have posed new challenges in achieving their financial goals. This is according to new research published by Bank of America’s Better Money Habits exploring this generation’s (ages 18 to 25) distinct approach to money – including their financial priorities, behaviors and challenges. With Gen Z being far more diverse than previous generations, the new research also examines ways in which race, ethnicity and gender may influence their financial priorities and challenges.  

According to 73% of Gen Z, the current economic environment has made it more challenging to save. They feel inflation has made it harder to save for financial goals (59%) and pay down debt (43%) and has created more financial stress (56%) in their lives. Forty percent also say surging rents or home prices have made it challenging to afford day-to-day necessities. According to The Bank of America Institute, younger consumers are getting squeezed the most by higher rent inflation, with median rent payments up 16% year over year in July for Gen Z, compared to just 3% for Baby Boomers.

Gen Z isn’t taking inflation and the higher cost of living sitting down. Currently, 75% of Gen Z are taking or considering steps to earn additional income including: changing jobs (34%), turning a passion into a source of income (31%), taking on a second job (26%) or even a job they don’t like (23%).

“Gen Z is ambitious and enterprising, and taking positive actions as they join the workforce and make some of their first financial and career-driven decisions,” said Christine Channels, Head of Community Banking and Consumer Governance at Bank of America. “Current economic and inflationary headwinds have created added challenges for many. Through our Better Money Habits platform, we’re connecting these young adults to a wide range of resources and guidance designed to give them the skills, knowledge and confidence to succeed financially.”

Other key findings from the Better Money Habits research include:

When it comes to success at work and in life, Gen Z is driven by the desire to achieve financial peace of mind (74%) and to comfortably afford the things they want.

  • Gen Z’s top three priorities for the year ahead include furthering their education (40%), advancing their career/salary (32%) and getting a new job (31%). These priorities are followed closely by saving for retirement (25%), traveling (24%), buying a car (22%) and building good credit (20%).
  • They’re more likely than other generations to cite the desire to comfortably afford material items (45%) as a motivator to achieving financial success (vs. 34% of Millennials, 30% of Gen X, 30% of Boomers).
  • More than half (56%) of Gen Z say discipline is a key trait to achieving financial success, with other important traits and characteristics being financial savvy (37%), organization (35%), motivation (34%), self-awareness (29%), frugality (20%) and confidence (20%).
  • Today, two-thirds (66%) are actively saving for financial goals and, despite the current environment, 58% are optimistic about their financial futures.

Much of Gen Z has the financial basics down, though struggle with more complex topics such as investing and debt. 

  • Gen Z feels equipped to handle basic financial tasks, including budgeting (71%), managing day-to-day expenses (70%) and building/managing credit (65%). However, preparedness levels decrease significantly when it comes to the future and more complex topics, including building an emergency fund (54%), saving for retirement (43%) and investing (29%).
  • Nearly 40% have no investments and of those the top reasons for not investing include having no additional funds to spare (44%), not knowing where to start (31%) and feeling investing is too risky (23%).

Federal student loan freeze brings some relief.

  • Nearly half (47%) of Gen Z already carries some form of debt, including through credit cards and student loans.
  • They have found that the federal student loan freeze has brought them some relief. Among those with student loans, 41% say the freeze allowed them to maintain their current standard of living, 23% say it allowed them to contribute more to their savings, and 21% say they’ve been able to continue paying down their loan without collecting interest.

When dating, Gen Z would rather talk religion and politics than about their money.

  • Growing up, 35% of Gen Z reported having open discussions with parents or guardians about financial topics – more so than Millennials (26%), Gen X (23%) or Boomers (21%).
  • Despite greater dialogue about money at a young age, Gen Z still view money talk as a more taboo topic of discussion early in romantic relationships. During the first six months of a new relationship, they feel more comfortable discussing religion (81%), politics (75%) and previous relationships (71%) than they do their income (69%) and debt (60%).
  • Many also feel more comfortable meeting their partner’s family (80%) and saying “I love you” (73%) within the first six months than they do talking about money.

Demographic Spotlights

The research also explored how race and gender may influence financial priorities and challenges, including the racial wealth gap. Reflecting on the last five years, about two-in-five Black/African American (41%) and Hispanic (42%) Gen Z say some or significant progress has been made to close the racial wealth gap, while others in these groups say no progress has been made (both 30%). Looking to the next five years, about half of Black/African American (47%) and Hispanic (54%) Gen Z believe some or significant progress will be made to close the gap, while others say no progress will be made (28% and 24%, respectively). Additional findings include:

Black/African American Gen Z is paving the way toward financial independence and embracing a hustle culture, though barriers persist around debt and saving.

  • 60% of Black/African American Gen Z identify as mostly or fully financially independent – more so than their non-Black/African American peers (45%).
  • 80% are currently/considering taking routes to earn supplemental income – more so than their non-Black/African American peers – including taking on a second job (35% vs. 25%).
  • They are 3x as likely to prioritize starting or growing a business in the year ahead compared to non-Black/African American Gen Z (15% vs. 5%).
  • Black/African American Gen Z is nearly twice as likely to say they currently invest or are considering investing in cryptocurrencies than non-Black/African American Gen Z (22% vs. 12%).
  • While Black/African American Gen Z is more likely to have debt than their counterparts (60% vs. 44%), this is down from 70% year-over-year.
  • This community is more likely to cite taking on too much student loan and/or credit card debt as their biggest financial regret (30% vs. 17%).
  • 40% contributed to their savings over the last year (vs. 56% of non-Black/African American Gen Z), however two-thirds (67%) don’t have enough emergency savings to cover three months of expenses – with one-third (32%) of all Black/African American Gen Z citing not having an emergency fund as their biggest financial regret.

Family is at the cornerstone of Hispanic Gen Z’s financial lives; equate homeownership with financial success.

  • 54% percent of Hispanic Gen Z is not financially independent and still rely on family for financial support.
  • Family is also more of financial motivator, with 36% hoping to pass down wealth to the next generation (vs. 27% of non-Hispanic Gen Z) and to succeed financially to make their parents proud (36% vs. 23%).
  • 57% say being able to provide for their family’s future is part of their definition of financial success, and 64% say it’s important to educate their family and/or community on financial matters.
  • Despite an emphasis on family support, nearly two-thirds (65%) say their parents did not talk about finances openly when they were growing up.
  • Education gaps remain a barrier for this community when it comes to investing. 42% don’t have any investments, and when asked why, the top reason is not knowing where to start (42% vs. 27% of non-Hispanic Gen Z).
  • Hispanic Gen Z is prioritizing homeownership. Nearly half (45%) say fully paying off a home/mortgage aligns with their definition of financial success, and they’re more likely to prioritize buying a home in the year ahead (22% vs. 14% of non-Hispanic Gen Z).

Gen Z women’s financial literacy gaps and lack of investing, relative to men, may negatively impact their near and long-term financial wellness.

  • Gen Z women and men feel equally equipped to build/maintain credit (64% vs. 66%) and stick to a budget (69% vs. 73%).
  • However, Gen Z women feel less equipped to manage day-to-day expenses (63% vs. 76%) and to build an emergency fund (48% vs. 61%). Just 38% of Gen Z women have enough emergency savings to last three months, compared to 48% of Gen Z men.
  • In terms of longer-term planning and investing, Gen Z women’s financial knowledge has them feeling less equipped than Gen Z men to save for retirement (37% vs. 49%) and to invest (22% vs. 35%).
  • Today, 41% of Gen Z women have not yet begun investing, compared to 34% of men, and are less likely to even be considering individual investments (36% vs. 47%) or retirement savings vehicles such as a 401(k) (39% vs. 46%).

“We recognize the unique financial needs across diverse and historically underserved communities,” Channels added. “The insights from this annual research help to inform how we tailor resources and guidance to empower the next generation as they embark on their financial journeys. Last year, for instance, we developed a Gen Z financial guide based on insights into the priorities, preferences and challenges of this growing client segment.”


The study was conducted June 24 – July 13, 2022, by Ipsos in both English and Spanish and is based on nationally representative probability samples of 1,098 general population adults (age 18 or older), and a partially overlapping sample of 921 Gen Z adults (age 18-25), including 124 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. Panelists are scientifically recruited into this invitation-only panel via postal mailings to a random selection of residential addresses. To ensure that non-internet households are included, Ipsos provides access to a tablet and internet connection to those who need them. Because of this probability-based sampling approach, KnowledgePanel findings can be reported with a margin of sampling error and projected to the general population. The margin of sampling error for the general population sample is +/- 3.2 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.

Source: Bank of America

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