72% of Young Adults Take Action to Improve their Financial Health, finds BofA Better Money Habits Study

Gen Z (ages 18-28) is finding adulthood more expensive than expected. Facing this, nearly three quarters of them are taking action to improve their financial health, according to Bank of America’s 2025 Better Money Habits® financial education study (PDF), published today.

Gen Z is challenging the stereotype when it comes to young people and their finances,” said Holly O’Neill, president of Consumer, Retail and Preferred Banking at Bank of America. “Even though they’re facing economic barriers and high everyday costs, they are working hard to become financially independent and take control of their money.”

Key findings from the study include:

• Over the last 12 months, 72% took steps to improve their financial health, such as putting money toward savings (51%) or paying down debt (24%).
• Nearly two-thirds (64%) focused on reducing expenses – 41% cut back on dining out and 23% shopped at more affordable grocery stores.
• And more are going it alone. While 39% receive financial support from parents and other family members, this is down from 46% a year ago. And they are getting less money – 22% receive $1,000 or more per month compared to 32% a year ago, and 54% receive less than $500 per month compared to 44% a year ago.
• When it comes to their romantic lives, many Gen Z aren’t spending money on dates – with roughly half of men (53%) and women (54%) spending $0 a month, and 25% of men and 30% of women spending less than $100 per month.

According to the study, about half (51%) of Gen Z surveyed say the high cost of living is a barrier to financial success. Total monthly spending is higher than they thought it would be for 35%, especially for everyday expenses including groceries (63%), rent and utilities (47%) and dining out (42%).

Budget Busting

The study found that Gen Z feel a lack of income is a problem as well, with over half (53%) not feeling they make enough money to live the life they want, and many are struggling to save consistently. In fact, 55% don’t have enough emergency savings to cover three months of expenses.

While Gen Z knows that saving for the future is important, they struggle to do so, with close to half (43%) saying they are not on track to actively save for retirement in the next five years, though they’d like to be. Many see saving for retirement and investing as symbols of financial independence (42% and 35% respectively). However, only a quarter (25%) contributed to a retirement account in the last year and one-in-five (21%) invested in the stock market, up slightly from recent years.

Despite a lack of income, Gen Z finds ways to enjoy the little things, whether celebrating a win or trying to help turn around a bad day: 57% buy themselves a small “treat” at least once a week. Unfortunately for over half (59%), this leads to overspending, making little treats a slippery slope.

And, according to data from Bank of America Institute (PDF), while there are signs of some pressures on younger generations, the median deposit level of Gen Z and Millennials remains elevated compared to 2019 levels – showing that these generations do not appear to be running down their savings in the face of higher costs.

Acting on Money Worries

A third (33%) of Gen Z are stressed about their finances, and of those, 52% say economic instability is a root cause. When stressed about their finances, many (90%) are likely to take action, including checking their bank account balance (69%), making a budget (64%), getting ahead on paying bills (46%) or other smart money moves. But for some, stress leads to avoidance or splurges: 33% of Gen Z are likely to avoid thinking about or taking positive actions on their finances when they’re feeling stressed financially; 30% are likely to treat themselves to a purchase when worried about money.

Financial Green Flags

Gen Z understands the importance of financial health, and they value being transparent with friends about money. Consistent with findings in prior years, two-thirds (66%) of Gen Z don’t feel pressured by their friends to spend beyond their means, and 42% feel comfortable declining social activities and letting their friends know it’s because they can’t afford them.

Financial health also matters in romantic relationships for Gen Z – with nearly four out of five (78%) saying that financial responsibility is an important attribute when choosing a significant other.

Methodology

This survey was conducted online from April 4 – 25, 2025, by Ipsos. This study is based on national samples of 1,069 general population adults (age 18 or older), 915 general population Gen Z adults (age 18-28). The survey was conducted both in English and Spanish and utilized samples from both opt-in sources and the Ipsos KnowledgePanel®, the largest and most well-established online probability-based panel that is representative of the adult US population. The margin of sampling error for the general population sample is +/- 3.1 percentage points and for the general population Gen Z sample is +/- 3.5 percentage points at the 95 percent confidence level.