Faced with an increase in living expenses, about three-quarters of young adults are proactively enhancing their financial wellbeing, reveals research conducted by Bank of America's Better Money Habits Study.
The Bank of America's 2025 Better Money Habits study has shed light on the financial habits and challenges faced by Gen Z, individuals aged between 18 and 28. The study, conducted online from April 4 - 25, 2025, by Ipsos, reveals that 72% of Gen Z are actively improving their financial health.
A significant number of Gen Zers are taking concrete steps to improve their financial health. Approximately 51% are saving money, while 24% are paying down debt. Moreover, 64% are focused on reducing expenses, with 41% cutting back on dining out and 23% shopping at more affordable grocery stores.
Financial independence is on the rise, with family financial support dropping from 46% to 39% year-over-year. However, the amount received from parents has also decreased. While 22% of Gen Z receive $1,000 or more per month compared to 32% a year ago, 54% receive less than $500 per month compared to 44% a year ago.
Despite these efforts, many Gen Zers face challenges such as high living costs, with over half lacking a three-month emergency fund. Additionally, 43% are not on track for retirement savings. Nevertheless, 90% take positive actions like budgeting when worried about money, showing a strong sense of financial responsibility amidst economic pressures.
Financial responsibility is an important attribute for 78% of Gen Z when choosing a significant other. Moreover, 42% of Gen Z feel comfortable declining social activities and letting their friends know it's because they can't afford them.
The study also shows that Gen Z is finding adulthood more expensive than expected. Despite a lack of income, 57% of Gen Z buy themselves a small "treat" at least once a week. However, 66% of Gen Z don't feel pressured by their friends to spend beyond their means.
The survey's margin of sampling error is +/- 3.1 percentage points for the general population sample and +/- 3.5 percentage points for the general population Gen Z sample.
The findings of the Bank of America's 2025 Better Money Habits study suggest a Gen Z cohort that is financially self-aware and action-oriented, striving for independence despite economic obstacles and higher-than-expected costs of adulthood.
[1] Bank of America. (2025). 2025 Better Money Habits® study. [online] Available at: https://www.bankofamerica.com/bettermoneyhabits/resources/research/2025-better-money-habits-study.go
[2] Ipsos. (2025). Bank of America's 2025 Better Money Habits study. [online] Available at: https://www.ipsos.com/en/bank-america-2025-better-money-habits-study
[3] CNBC. (2025). Bank of America's 2025 Better Money Habits study reveals financial trends among Gen Z. [online] Available at: https://www.cnbc.com/2025/05/10/bank-of-americas-2025-better-money-habits-study-reveals-financial-trends-among-gen-z.html
[4] Forbes. (2025). Bank of America's 2025 Better Money Habits Study: Gen Z Is Focused On Financial Health. [online] Available at: https://www.forbes.com/sites/ashleystahl/2025/05/10/bank-of-americas-2025-better-money-habits-study-gen-z-is-focused-on-financial-health/?sh=5e7468d15f4d
- In the Bank of America's 2025 Better Money Habits study, it was found that Gen Z demonstrates a strong focus on personal-finance, with 51% saving money, 24% paying down debt, and 64% striving to reduce expenses.
- The education-and-self-development aspect is also evident in Gen Z's financial behavior, as they strive for self-reliance, with financial independence rising amidst economic pressures, despite challenges such as high living costs and dwindling family financial support.
