A recent study has uncovered that almost half of Generation Z individuals between the ages of 18 and 27 rely on their families for financial assistance. This finding is in the midst of increasing living expenses that are putting a strain on the financial independence of many young Americans. Based on an Ipsos survey conducted in April and May with over a thousand participants, the study revealed that 46% of Gen Zs rely on their parents or other family members for financial support.
This assistance is not limited to college students; 30% of non-students also receive financial help from their families. Among those receiving assistance, 32% reported receiving $1,000 or more monthly, while 44% received $500 or less. The financial aid is mainly used to cover essential expenses such as groceries, rent, utilities, phone plans, and health insurance.
Despite the practice of ‘loud budgeting’—a trend where young people openly discuss their financial limitations with friends—57% of Gen Zs still do not have enough savings to cover three months’ worth of expenses. Only 18% have contributed to an emergency fund in the past year.
Gen Z’s financial reliance
‘Loud budgeting’ has gained popularity on TikTok, where young individuals openly share what they can and cannot afford. The study discovered that 38% of Gen Zs are comfortable admitting to their friends that they cannot attend certain social events due to financial constraints. Additionally, 63% feel that they are not pressured by friends to overspend, indicating that this generation is establishing stronger financial boundaries compared to previous ones.
This transparency represents a significant change from earlier generations. An example from popular culture is an episode of “Friends” from 1995, where characters awkwardly address their more financially stable friends about their inability to participate in certain activities. At that time, such discussions were considered taboo.
However, being open about finances does not automatically lead to financial stability. Holly O’Neill, President of Retail Banking at Bank of America, stressed the significance of empowering Gen Z to attain financial well-being and achieve their long-term goals despite the current economic difficulties.
