Almost half of generation Z depends on financial help from their parents

J.oe Cruz works three jobs in Austin. But because of the debt and the rising cost of living in Texasthe 26-year-old moved in with his father a few years ago and has been there ever since.

“I tried the whole rent thing,” Cruz told TIME. “It was outrageously expensive, so I moved back home and I’ve been there for about two years now – paying off student debt, credit cards, car payments, that sort of thing.”

Cruz is one of many people in his generation who receives some type of financial assistance. A new report released last week by Bank of America’s Better Money Habits financial education team found that 46% of Gen Zers ages 18 to 27 rely on financial assistance from their parents and family. The survey – which interviewed more than 1,000 members of Gen Z in April and May – found that 52% of respondents said they don’t make enough money to live the life they want, pointing to cost of living as one of Gen Z’s top financial challenges. .Z Faces.

“The fact that they rely so much on other people for support really explains why they don’t feel like they have enough money to live the life they want,” says Shannah Stephens, community banking executive at Bank of America. “They are sharing with us that this is insufficient incomethis whole inflationary environment, which really makes it difficult for them to actually achieve their financial goals and ambitions.”

Members of Gen Z who receive financial assistance — whether from family, the government or friends — said they used that money to help pay for groceries and toiletries, rent and utilities, phone plans and health-related expenses, it found. the report.

Many of the Gen Zers interviewed for the report said they are putting off important milestones, including buying a home, saving for retirement or starting to invest. Around 54% of them said they did not pay for their own housing. Of those who do, nearly two-thirds said they spend more than 30% of their monthly salary on housing. Stephens says general financial advice dictates what people should spend no more than 20-30% of your monthly income in housing.

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Cruz went to college in upstate New York and lived in New York City and Washington, D.C. until the COVID-19 pandemic. He moved back to Austin during the pandemic and later tried renting a house with two friends for about a year, but became frustrated with how much he was spending on rent.

Now, Cruz has a full-time job as an account executive at a printing company that produces merchandise for progressive political campaigns, and works part-time in retail and landscaping. While living on his father’s farm, Cruz pays what he can; His father also subsidizes his rent because Cruz often helps out around the property. Cruz drives everywhere and his father helps him pay for gas too.

Bianca Alvarado, 24, lives in Burbank, California, and her parents pay for her car expenses, her car insurance, and sometimes her groceries. In the past, she paid what she could to help with car payments, but Alvarado has struggled to find steady work and was recently laid off from her part-time job in public relations. To earn extra money, she occasionally delivers for Uber Eats — which she says she’ll probably have to do more of as she looks for her next job.

“That’s not something I want to do,” she admits. “I prefer to stay in the office all day; I like having coworkers and having that kind of environment. But the way things are now, it’s just what I do to survive when necessary.”

Alvarado says she feels lucky to be able to ask her parents for help, but adds that her parents sometimes struggle too; There were times when her father’s credit card was declined to pay for car insurance and she had to use her savings to pay the bill.

“It makes me feel really defeated,” Alvarado says of having to turn to her parents for financial help. “I don’t want my family to help me – I would like to be an independent girl and not have to depend on anyone for anything. But that’s just, unfortunately, the society or economy we live in now. Things are difficult.

Both Cruz and Alvarado say they are not surprised that nearly half of the Gen Zers surveyed for the Bank of America report rely on financial help from their families. In fact, Cruz says he thought the number would be even higher.

“This makes me very frustrated. It makes me feel very forgotten by the city – those responsible for housing regulation and price increases,” says Cruz. “We are resorting to alternatives, such as living at home, living with partners, several people in houses.”

The Bank of America report found that nearly 70% of Gen Zers surveyed are implementing lifestyle changes, including cutting back on dining out, stopping going out with friends and shopping at more affordable grocery stores.

“I think that’s what’s so refreshing about Gen Z, and I think maybe what’s misunderstood about Gen Z,” says Stephens. “Gen Z is really taking control of their finances. They are making necessary changes due to high housing costs. They are making changes in other aspects of their lives so they can try to live more of the life they want to live.”

Alvarado now lives in an apartment with a roommate, but recently found out her rent is going up. She plans to move this summer. She says it’s “disheartening” to think about how she can’t live alone.

Alvarado says her father told her he hopes she will be more financially independent by the time she turns 25.

“I really hope I can, but also… what if I can’t? There’s always that thought in the back of my mind,” she says.

“I don’t think anyone wants to steal from their parents,” she continues. “We don’t want to depend on our parents for things. We want to be independent. But that’s simply not possible.”