Gen Z is more financially independent as savings rates rise, study finds
FOX Business Correspondent Madison Alworth reports on how Gen Z is embracing supermarkets, leading to an increase in in-store spending, on ‘The Big Money Show.’
American youth are working to jump over about their future goals and retirement despite housing costs squeezing their budgets, finds a new report.
Bank of America on Tuesday released its latest Better Money Habits study on how older members of Gen Z are managing their finances as they get older. It found that Gen Z is becoming more financially independent, with just 34% receiving financial help from parents or other family members – down from 39% in 2025 and 46% in 2024.
“We see that as very good — more savings, less dependence on family members for success,” Will Smayda, head of financial institutions at Bank of America, told FOX Business. “It turns out that growth is hard, and it’s expensive.”
Gen Z was also at the forefront of the “high-budget” trend, as 42% of respondents said they were comfortable with the decline of social opportunities and agreed that they would not be able to participate – an unchanged figure from 2025 and remaining from 38% in 2024.
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Bank of America has found that Gen Z sticks to high budgets. (Getty Images/iStock)
“They talk a lot about spending habits, being free to say no to certain expenses such as travel or a nice night out at a restaurant,” Smayda said, adding that the big habit of budgeting is very different. “In fact, I think, I have a life where people are free about how they save, and how they spend, and the fact that sometimes you make difficult decisions.”
Smayda noted that 75% of respondents said they were looking for ways to spend less money, especially in their social lives when they make plans with friends by offering. free or low-cost activitiesordering cheaper menu items or fewer drinks, and other strategies.
This trend is most prominent among those in Gen Z between the ages of 23 and 25, and the older age group of 26 to 29 years.
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Bank of America’s Better Money Habits report found that members of Gen Z are more focused on saving and maintaining their budgets. (Michael Nagle/Bloomberg via Getty Images)
“I like the fact that saving and making tough decisions is something this generation is comfortable talking about publicly, and it reinforces morals. Saying no to something is moral,” he said. “It might hurt a little in the short term, but it certainly helps people stay on track.”
“We remind our customers and our Gen Z in particular, that they should balance immediate management, if you like, with long-term savings. The cost of home ownership continues to rise, and it continues to be one of the most important and accessible ways to build wealth worldwide for everyone. So we continue to ensure that there is something solid, common, in many digital situations, saving habits,” said Smayda.
While Gen Z is increasingly independent, it continues to seek validation for its purchasing decisions, with 40% of Gen Z seeking validation from family or friends – compared to 26% of millennials, 20% of Gen X and 15% of baby boomers. Of the Gen Z members who do, 18% want confirmation before buying, 8% do it afterwards and 14% do it both before and after the purchase.
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Two-thirds of Gen Z save money, Bank of America found. (Stock)
A growing portion of Gen Z are saving money, and Bank of America’s Better Money Habits report found that 66% are currently saving — up from 63% last year and 60% in 2024. Among Gen Z savers, 36% put extra money into savings when possible, while 22% contribute to savings. 401(k) retirement account and 22% also reported using a high-yield savings account.
At the top housing costs has been a significant challenge for members of Gen Z, as the report found that 29% of Gen Z respondents said housing costs are the top barrier to their financial success – a figure that has changed little over the past four years. It also found that 17% reported spending more than half of their income on housing.
“That’s up,” Smayda said, noting that it’s one of the most concerning data points in the report as it rises from 13% in 2025 and 10% in 2024.
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“When you put a lot of your income into a house, it puts a strain on other parts of your financial life – it puts a strain on your savings and obviously, maybe not as important, your discretionary spending, your happy spending if everything is going to rent or house fee,” he explained.
