As Gen Z looks to establish its financial footing, the economic environment and inflation have posed new challenges in achieving its financial goals. This is according to new research published by Bank of America’s Better Money Habits exploring this generation’s (ages 18 to 25) distinct approach to money – including their financial priorities, behaviors, and challenges. With Gen Z being far more diverse than previous generations, the new research also examines ways in which race, ethnicity, and gender may influence their financial priorities and challenges.

Lots of Challenges

According to 73% of Gen Z, the current economic environment has made saving more challenging. They feel inflation has made it harder to save for financial goals (59%) and pay down debt (43%) and has created more financial stress (56%) in their lives, according to a news release. Forty percent also say surging rents or home prices have made it challenging to afford day-to-day necessities. According to The Bank of America Institute, younger consumers are getting squeezed the most by higher rent inflation, with median rent payments up 16% year over year in July for Gen Z, compared to just 3% for Baby Boomers.

Gen Z isn’t taking inflation and the higher cost of living sitting down. Currently, 75% of Gen Z are taking or considering steps to earn additional income including changing jobs (34%), turning a passion into a source of income (31%), taking on a second job (26%), or even a job they don’t like (23%).

“Gen Z is ambitious and enterprising, and taking positive actions as they join the workforce and make some of their first financial and career-driven decisions,” said Christine Channels, Head of Community Banking and Consumer Governance at Bank of America in the news release. “Current economic and inflationary headwinds have created added challenges for many. Through our Better Money Habits platform, we’re connecting these young adults to a wide range of resources and guidance designed to give them the skills, knowledge, and confidence to succeed financially.”

Key Findings

Other key findings from the Better Money Habits research include the following:

When it comes to success at work and in life, Gen Z is driven by the desire to achieve financial peace of mind (74%) and to comfortably afford the things they want:

  • Gen Z’s top three priorities for the year ahead include furthering their education (40%), advancing their career/salary (32%), and getting a new job (31%). These priorities are followed closely by saving for retirement (25%), traveling (24%), buying a car (22%), and building good credit (20%).
  • They’re more likely than other generations to cite the desire to comfortably afford material items (45%) as a motivator to achieving financial success (vs. 34% of Millennials, 30% of Gen X, and 30% of Boomers).
  • More than half (56%) of Gen Z say discipline is a key trait to achieving financial success, with other important traits and characteristics being financial savvy (37%), organization (35%), motivation (34%), self-awareness (29%), frugality (20%) and confidence (20%).
  • Today, two-thirds (66%) are actively saving for financial goals and, despite the current environment, 58% are optimistic about their financial futures.

Much of Gen Z has the financial basics down, though struggle with more complex topics such as investing and debt:  

  • Gen Z feels equipped to handle basic financial tasks, including budgeting (71%), managing day-to-day expenses (70%), and building/managing credit (65%). However, preparedness levels decrease significantly when it comes to the future and more complex topics, including building an emergency fund (54%), saving for retirement (43%), and investing (29%).
  • Nearly 40% have no investments and of those, the top reasons for not investing include having no additional funds to spare (44%), not knowing where to start (31%), and feeling investing is too risky (23%).

The federal student loan freeze brings some relief:

  • Nearly half (47%) of Gen Z already carry some form of debt, including through credit cards and student loans.
  • They have found that the federal student loan freeze has brought them some relief. Among those with student loans, 41% say the freeze allowed them to maintain their current standard of living, 23% say it allowed them to contribute more to their savings, and 21% say they’ve been able to continue paying down their loan without collecting interest.


The study was conducted June 24 – July 13, 2022, by Ipsos in both English and Spanish and is based on nationally representative probability samples of 1,098 general population adults (age 18 or older), and a partially overlapping sample of 921 Gen Z adults (age 18-25), including 124 Gen Z adults from a non-probability sample. This survey was conducted primarily using the Ipsos KnowledgePanel, an online probability-based panel representative of the adult US population. Panelists are scientifically recruited into this invitation-only panel via postal mailings to a random selection of residential addresses. To ensure that non-Internet households are included, Ipsos provides access to a tablet and Internet connection to those who need them. Because of this probability-based sampling approach, KnowledgePanel findings can be reported with a margin of sampling error and projected to the general population. The margin of sampling error for the general population sample is +/- 3.2 percentage points at the 95 percent confidence level.

Source: Bank of America Corp.