Young adults in Gen Z (ages 18-29) are becoming less reliant on their parents for financial support, but high living costs continue to delay their path to full independence, according to Bank of America's latest annual survey on Gen Z financial health.
I spoke with Will Smayda, head of financial centers at Bank of America, about the key findings. Here's what stood out (interview edited and condensed):
Declining Reliance on Family Support
The most encouraging statistic: Only 34% of Gen Z report receiving financial help from parents or family — down significantly from 46% in 2024. Reliance drops further as they move through their 20s, while savings tend to rise.
Widespread Paycheck-to-Paycheck Reality
Despite the positive trend, 42% of Gen Z say they live paycheck to paycheck. Notably, even among those earning six figures ($100,000+), 29% are still in that position. Rising costs for rent, transportation, and other basics are consuming a large share of their income.
Top Financial Stressors
Gen Z’s main pressures are split roughly evenly across three areas:
- Paying off debt (student loans and credit cards)
- Saving for major milestones like moving out or buying a home
- Building an emergency fund
Smayda emphasized that the emergency fund is often overlooked. “Young people love talking about bitcoin, stocks, or the latest IPO, but many have little to no cash savings,” he noted.
The “Little Treats” Phenomenon
92% of respondents admit to buying themselves small luxuries despite financial stress and guilt. Smayda compared it to a $6 Starbucks coffee — a small daily comfort when big goals like homeownership or debt freedom feel out of reach.
Open Conversations About Money
60% of Gen Z regularly talk about money with friends, a big shift from previous generations. This openness has fueled “loud budgeting” — publicly declining expensive plans because they don’t fit the budget. 75% actively seek cheaper ways to socialize, which Smayda views as a healthy normalization of delayed gratification.
Dating and Relationships
56% of Gen Z respondents are single, and only 11% of singles are actively dating. Many spend $0 per month on their love life. Traditional dating (dinners and movies) has shifted toward digital connections, but financial responsibility tops the list of desired traits in a partner.
Side Hustles Underutilized
Only 16% have taken on a side gig to offset costs. Smayda believes more should leverage the gig economy, noting that Gen Z grew up with digital platforms that make monetizing skills (writing, tutoring, data work, etc.) easier than ever.
Memorable Spending Stories
The survey context includes stories like a 28-year-old spending nearly $40,000 in savings to attend the World Cup in person. Smayda’s reaction: “Terrible financial decision… and I’m so jealous.” He suggested streaming or seeking sponsorships as smarter alternatives, while acknowledging the appeal of living experiences in youth.
Practical Advice for Gen Z and Parents
- Don’t view moving home as failure. It can be a strategic way to save money and build a financial foundation.
- Parents should set clear boundaries. Smayda shared how his own mother charged him rent immediately after graduation, which motivated him to become independent.
- Focus on fundamentals: Aggressively manage debt and prioritize an emergency fund.
- Structured support from parents, balanced with their own retirement needs, prevents long-term dependency.
Overall, the data shows Gen Z making progress toward financial self-sufficiency while still grappling with affordability challenges in housing, debt, and daily life. Small behavioral shifts — like loud budgeting and strategic saving — could help accelerate their progress.