Personal Finance
Survey: Majority of Gen Zers Report Making Positive Money Steps
For years, many Americans along with members of the media have often mistakenly referred to freshly-graduated and college students as “Millennials” when, in fact, it’s now Gen Z that is entering adulthood. As they do so, Gen Zers are learning a lot about money — especially during the past 18 months or so. However, as a recent Bank of America survey of 18 to 24-year-olds shows, a majority of these young adults are navigating financial adulthood with some notable success.
First, 80% of Gen Zers surveyed reported making at least one positive financial step over the past year. The most popular among these was adding to savings, which 70% of respondents said they had done. Meanwhile, 29% noted that they’d mapped out financial goals in the past year. As for investments, 26% said they’d contributed to a retirement account and 26% had invested in the stock market. In terms of financial knowledge, respondents expressed strong knowledge of basic financial concepts including savings (85%), money management (82%), and budgeting (77%), although fewer were knowledgable in more specific topics such as retirement (38%), investing (30%), and home buying (26%).
What’s encouraging is that, despite the many financial challenges that the pandemic has brought upon the United States, the majority of Gen Z respondents remain seemingly upbeat, with 68% expressing optimism in regards to their financial futures. In fact, 70% said that the pandemic helped them realize their financial priorities. These priorities include saving for future goals (33%) as well as living more frugally (19%). On a somewhat related note, 49% of respondents said they were fully or at least mostly financially independent from their parents while 24% were prioritizing financial independence as a goal.
Of course, despite the optimism and goals, there are some hurdles that this generation faces. Asked about such barriers, 46% cited insufficient income as a reason why they’ve been unable to achieve their financial goals. Others noted a lack of job stability (23%) and being unable to save (21%). As for what their greatest financial stressors were, 37% said that not being able to afford the lifestyle they wanted was the primary source of stress followed by a lack of an emergency fund (33%), student debt (22%), health care costs (17%), and living paycheck to paycheck (11%).
Commenting on the results of the survey, Bank of America’s Head of Community Banking and Client Protection Christine Channels said, “As Gen Z gets started financially and professionally, we see a great deal of motivation and positive steps toward building a solid financial foundation. At the same time, an unmistakable need for more financial education persists among this generation.” Channels added, “Through our Better Money Habits platform, we’re committed to connecting these young adults to a wide range of resources and guidance to help them develop financial know-how, and navigate barriers to achieving their goals.”
While it’s hard to tell how much surveys such as this line up with the actual experience of many young Americans, it’s always encouraging to hear positive results from those of any generation. In particular, it’s interesting to note that the 26% of Gen Zers who say that they’ve contributed to a retirement account is an impressive figure considering that respondents were all under the age of 24. Overall, habits such as these along with some of the tough financial lessons they may have learned from the pandemic are sure to serve this generation well moving forward.
