A new study has revealed that nearly half of Generation Z individuals aged 18 to 27 rely on their families for financial support. This comes amid rising living costs that strain the financial independence of many young Americans. Based on an Ipsos survey conducted in April and May with over a thousand participants, the study found that 46% of Gen Zs depend on their parents or family members for financial assistance.
This support is not limited to college students; 30% of non-students also receive help from their families. Among those receiving assistance, 32% reported getting $1,000 or more monthly, while 44% received $500 or less. The financial aid primarily helps cover essential expenses such as groceries, rent, utilities, phone plans, and health insurance.
Despite practicing ‘loud budgeting’—a trend where young people openly discuss their financial constraints with friends—57% of Gen Zs still lack savings to cover three months’ worth of expenses. Only 18% have contributed to an emergency fund in the past year.
Gen Z’s financial dependence
Loud budgeting” has become a popular trend on TikTok, where young individuals candidly share what they can and cannot afford. The study found that 38% of Gen Zs are comfortable admitting to their friends that they can’t attend certain social events due to financial reasons. Additionally, 63% feel they aren’t pressured by friends to spend more than they can afford, suggesting that this generation is setting firmer financial boundaries compared to previous ones.
This openness marks a significant shift from earlier generations. An example from popular culture is an episode of “Friends” from 1995, where characters awkwardly confront their more financially stable friends about their inability to participate in certain activities. Such conversations were considered taboo at the time.
However, being transparent about finances does not necessarily equate to financial stability. Holly O’Neill, President of Retail Banking at Bank of America, emphasized the importance of empowering Gen Z to achieve financial health and meet their long-term goals despite the current economic challenges.
