Almost half of Gen Zers get financial help from parents, according to recent report!
Due to the high cost of living, many young adults rely on financial support from their family. According to a recent report by Bank of America, that surveyed over 1,000 Gen Z adults in April and May, 46% of Gen Zers – aged 18 to 27 – receive financial help from their parents. Additionally, the report noted that 52% of them feel they don’t earn enough to live the lifestyle they desire, with daily expenses being a major obstacle to their financial well-being.
“The high cost of living is certainly impacting Gen Z”, said Holly O’Neill, president of retail banking at Bank of America.
Rising prices, particularly for essentials like food, gas, and housing, are affecting many consumers. Young adults, however, face extra financial hurdles. Their wages, adjusted for inflation, are lower than what their parents earned at the same age, and they carry larger student loan debts as well.
Compared to millennials, Gen Zers spend significantly more on necessities. About 15% of them have maxed out their credit cards, posing a higher risk of falling behind on payments than any other generation, according to the New York Fed in May.
“What delinquency rates are showing is that there is increased stress among some segments of the population”, noted New York Fed researchers.
On top of that, many Gen Zers are unable to enter the housing market, which significantly hinders their financial security, according to Brett House, economics professor at Columbia Business School. Housing expenses are second only to food and groceries for young adults needing financial help, as found by Bank of America. O’Neill advises her Gen Z children to follow the 50-30-20 rule: allocate 50% of income to necessities like food and housing, 30% to discretionary spending, and 20% to savings.
“The high cost of housing definitely is a barrier for them. We also found that the majority of Gen Z don’t pay for their own housing”, said O’Neill.