July 30, 2025 at 10:00 AM Eastern
Confronted With Higher Living Costs, seventy two percent of Young Adults Take Action to Improve Their Financial Health, Finds B of A Better Money Habits Study
CHARLOTTE, North Carolina – Gen Z (ages eighteen to twenty four) is finding adulthood more expensive than expected. Facing this, nearly three quarters of them are taking action to improve their financial health, according to Bank of America’s twenty twenty five Better Money Habits® financial education study (PDF), published today.
“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.”
Key findings from the study include:
According to the study, about half (fifty one percent) of Gen Z surveyed say the high cost of living is a barrier to financial success. Total monthly spending is higher than they thought it would be for thirty five percent, especially for everyday expenses including groceries (sixty three percent), rent and utilities (forty seven percent) and dining out (forty two percent).
The study found that Gen Z feel a lack of income is a problem as well, with over half (fifty three percent) not feeling they make enough money to live the life they want, and many are struggling to save consistently. In fact, fifty five percent don’t have enough emergency savings to cover three months of expenses.
While Gen Z knows that saving for the future is important, they struggle to do so, with close to half (forty three percent) saying they are not on track to actively save for retirement in the next five years, though they’d like to be. Many see saving for retirement and investing as symbols of financial independence (forty two percent and thirty five percent respectively). However, only a quarter (twenty five percent) contributed to a retirement account in the last year and one-in-five (twenty one percent) invested in the stock market, up slightly from recent years.
Despite a lack of income, Gen Z finds ways to enjoy the little things, whether celebrating a win or trying to help turn around a bad day: fifty seven percent buy themselves a small “treat” at least once a week. Unfortunately for over half (fifty nine percent), this leads to overspending, making little treats a slippery slope.
And, according to data from Bank of America Institute (PDF), while there are signs of some pressures on younger generations, the median deposit level of Gen Z and Millennials remains elevated compared to twenty nineteen levels – showing that these generations do not appear to be running down their savings in the face of higher costs.
A third (thirty three percent) of Gen Z are stressed about their finances, and of those, fifty two percent say economic instability is a root cause. When stressed about their finances, many (ninety percent) are likely to take action, including checking their bank account balance (sixty nine percent), making a budget (sixty four percent), getting ahead on paying bills (forty six percent) or other smart money moves. But for some, stress leads to avoidance or splurges: thirty three percent of Gen Z are likely to avoid thinking about or taking positive actions on their finances when they’re feeling stressed financially; thirty percent are likely to treat themselves to a purchase when worried about money.
Gen Z understands the importance of financial health, and they value being transparent with friends about money. Consistent with findings in prior years, two-thirds (sixty six percent) of Gen Z don’t feel pressured by their friends to spend beyond their means, and forty two percent feel comfortable declining social activities and letting their friends know it’s because they can’t afford them.
Financial health also matters in romantic relationships for Gen Z – with nearly four out of five (seventy eight percent) saying that financial responsibility is an important attribute when choosing a significant other.
This survey was conducted online from April fourth through twenty fifth, twenty twenty five, by Ipsos. This study is based on national samples of 1,069 general population adults (age 18 or older), 915 general population Gen Z adults (age eighteen to twenty eight). The survey was conducted both in English and Spanish and utilized samples from both opt-in sources and the Ipsos KnowledgePanel®, the largest and most well-established online probability-based panel that is representative of the adult United States population. The margin of sampling error for the general population sample is plus or minus three point one percentage points and for the general population Gen Z sample is plus or minus three point five percentage points at the 95 percent confidence level.
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, like our Gen Z Financial Guide that breaks down financial topics like budgeting, building credit, borrowing and investing 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.
Bank of America Institute is dedicated to uncovering powerful insights that move business and society forward. Established in twenty twenty two, the Institute is a think tank that draws on data and analyses from across the bank and the world to provide timely and original perspectives on the economy, sustainability, and global transformation. The Institute leverages the depth and breadth of the bank’s proprietary data, from 69 million consumer and small business clients, 58 million verified digital users, four point three trillion dollars in total payments in twenty twenty four and one point two trillion dollars in consumer and wealth management deposits. From this robust data set, the Institute provides a unique perspective on the health of the economy. It also elevates thought leadership from throughout the bank that addresses long-term trends and shares these findings with the general public.
Bank of America is one of the world’s leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 69 million consumer and small business clients with approximately 3,700 retail financial centers, approximately 15,000 A T Ms (automated teller machines) and award-winning digital banking with approximately 59 million verified digital users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 4 million small business households through a suite of innovative, easy-to-use online products and services. The company serves clients through operations across the United States, its territories and more than 35 countries. Bank of America Corporation stock is listed on the New York Stock Exchange (N Y S E colon B A C).
Susan Atran, Bank of America
Phone: one six four six seven four three zero seven nine one
susan.atran@bofa.com
Bar graph titled "Gen Z's Monthly Spending is High."
Over a third (thirty five percent) of Gen Z reported that their total monthly spending is higher than they expected it to be once they started financially supporting themselves. This is especially true for older Gen Z (23 through 28), who said that forty three percent was higher. twenty five percent of younger Gen Z (18 through 22) reported higher monthly spending.
Clustered bar graph titled "Gen Z & Millennial Emergency Funds."
Building an emergency fund remains difficult for Gen Z; over half (fifty five percent) do not have enough emergency savings to cover three months of expenses. Millennials struggle with building emergency savings too. twenty twenty two: Gen Z fifty five percent, Millennials forty six percent. twenty twenty three: Gen Z fifty six percent, Millennials forty eight percent. twenty twenty four: Gen Z fifty seven percent, Millennials forty nine percent. twenty twenty five: Gen Z fifty five percent, Millennials forty nine percent.
Bar graph titled "Gen Z Investing in the Stock Market."
twenty one percent of Gen Z invested in the stock market over the past year. Encouragingly, this is up year-over-year. nineteen percent in twenty twenty two; fifteen percent in twenty twenty three; fifteen percent in twenty twenty four; and twenty one percent in twenty twenty five.
Clustered bar graph titled "Gen Z & Millennial Emergency Funds."
Close to half (forty seven percent) of Gen Z receive financial support (versus fifty four percent in twenty twenty four). In twenty twenty four, thirty two percent received one thousand dollars or more and forty four percent received five hundred dollars or less. In twenty twenty five, twenty two percent receive one thousand dollars or more and fifty four percent receive five hundred dollars or less.
July 30, 2025 at 10:00 AM Eastern
Confronted With Higher Living Costs, seventy two percent of Young Adults Take Action to Improve Their Financial Health, Finds B of A Better Money Habits Study
CHARLOTTE, North Carolina – Gen Z (ages eighteen to twenty four) is finding adulthood more expensive than expected. Facing this, nearly three quarters of them are taking action to improve their financial health, according to Bank of America’s twenty twenty five Better Money Habits® financial education study (PDF), published today.
“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.”
Key findings from the study include:
According to the study, about half (fifty one percent) of Gen Z surveyed say the high cost of living is a barrier to financial success. Total monthly spending is higher than they thought it would be for thirty five percent, especially for everyday expenses including groceries (sixty three percent), rent and utilities (forty seven percent) and dining out (forty two percent).
The study found that Gen Z feel a lack of income is a problem as well, with over half (fifty three percent) not feeling they make enough money to live the life they want, and many are struggling to save consistently. In fact, fifty five percent don’t have enough emergency savings to cover three months of expenses.
While Gen Z knows that saving for the future is important, they struggle to do so, with close to half (forty three percent) saying they are not on track to actively save for retirement in the next five years, though they’d like to be. Many see saving for retirement and investing as symbols of financial independence (forty two percent and thirty five percent respectively). However, only a quarter (twenty five percent) contributed to a retirement account in the last year and one-in-five (twenty one percent) invested in the stock market, up slightly from recent years.
Despite a lack of income, Gen Z finds ways to enjoy the little things, whether celebrating a win or trying to help turn around a bad day: fifty seven percent buy themselves a small “treat” at least once a week. Unfortunately for over half (fifty nine percent), this leads to overspending, making little treats a slippery slope.
And, according to data from Bank of America Institute (PDF), while there are signs of some pressures on younger generations, the median deposit level of Gen Z and Millennials remains elevated compared to twenty nineteen levels – showing that these generations do not appear to be running down their savings in the face of higher costs.
A third (thirty three percent) of Gen Z are stressed about their finances, and of those, fifty two percent say economic instability is a root cause. When stressed about their finances, many (ninety percent) are likely to take action, including checking their bank account balance (sixty nine percent), making a budget (sixty four percent), getting ahead on paying bills (forty six percent) or other smart money moves. But for some, stress leads to avoidance or splurges: thirty three percent of Gen Z are likely to avoid thinking about or taking positive actions on their finances when they’re feeling stressed financially; thirty percent are likely to treat themselves to a purchase when worried about money.
Gen Z understands the importance of financial health, and they value being transparent with friends about money. Consistent with findings in prior years, two-thirds (sixty six percent) of Gen Z don’t feel pressured by their friends to spend beyond their means, and forty two percent feel comfortable declining social activities and letting their friends know it’s because they can’t afford them.
Financial health also matters in romantic relationships for Gen Z – with nearly four out of five (seventy eight percent) saying that financial responsibility is an important attribute when choosing a significant other.
This survey was conducted online from April fourth through twenty fifth, twenty twenty five, by Ipsos. This study is based on national samples of 1,069 general population adults (age 18 or older), 915 general population Gen Z adults (age eighteen to twenty eight). The survey was conducted both in English and Spanish and utilized samples from both opt-in sources and the Ipsos KnowledgePanel®, the largest and most well-established online probability-based panel that is representative of the adult United States population. The margin of sampling error for the general population sample is plus or minus three point one percentage points and for the general population Gen Z sample is plus or minus three point five percentage points at the 95 percent confidence level.
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, like our Gen Z Financial Guide that breaks down financial topics like budgeting, building credit, borrowing and investing 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.
Bank of America Institute is dedicated to uncovering powerful insights that move business and society forward. Established in twenty twenty two, the Institute is a think tank that draws on data and analyses from across the bank and the world to provide timely and original perspectives on the economy, sustainability, and global transformation. The Institute leverages the depth and breadth of the bank’s proprietary data, from 69 million consumer and small business clients, 58 million verified digital users, four point three trillion dollars in total payments in twenty twenty four and one point two trillion dollars in consumer and wealth management deposits. From this robust data set, the Institute provides a unique perspective on the health of the economy. It also elevates thought leadership from throughout the bank that addresses long-term trends and shares these findings with the general public.
Bank of America is one of the world’s leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 69 million consumer and small business clients with approximately 3,700 retail financial centers, approximately 15,000 A T Ms (automated teller machines) and award-winning digital banking with approximately 59 million verified digital users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 4 million small business households through a suite of innovative, easy-to-use online products and services. The company serves clients through operations across the United States, its territories and more than 35 countries. Bank of America Corporation stock is listed on the New York Stock Exchange (N Y S E colon B A C).
Susan Atran, Bank of America
Phone: one six four six seven four three zero seven nine one
susan.atran@bofa.com
Bar graph titled "Gen Z's Monthly Spending is High."
Over a third (thirty five percent) of Gen Z reported that their total monthly spending is higher than they expected it to be once they started financially supporting themselves. This is especially true for older Gen Z (23 through 28), who said that forty three percent was higher. twenty five percent of younger Gen Z (18 through 22) reported higher monthly spending.
Clustered bar graph titled "Gen Z & Millennial Emergency Funds."
Building an emergency fund remains difficult for Gen Z; over half (fifty five percent) do not have enough emergency savings to cover three months of expenses. Millennials struggle with building emergency savings too. twenty twenty two: Gen Z fifty five percent, Millennials forty six percent. twenty twenty three: Gen Z fifty six percent, Millennials forty eight percent. twenty twenty four: Gen Z fifty seven percent, Millennials forty nine percent. twenty twenty five: Gen Z fifty five percent, Millennials forty nine percent.
Bar graph titled "Gen Z Investing in the Stock Market."
twenty one percent of Gen Z invested in the stock market over the past year. Encouragingly, this is up year-over-year. nineteen percent in twenty twenty two; fifteen percent in twenty twenty three; fifteen percent in twenty twenty four; and twenty one percent in twenty twenty five.
Clustered bar graph titled "Gen Z & Millennial Emergency Funds."
Close to half (forty seven percent) of Gen Z receive financial support (versus fifty four percent in twenty twenty four). In twenty twenty four, thirty two percent received one thousand dollars or more and forty four percent received five hundred dollars or less. In twenty twenty five, twenty two percent receive one thousand dollars or more and fifty four percent receive five hundred dollars or less.
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