As Gen Z looks to establish their financial footing, the economic environment and inflation have posed new challenges in achieving their financial goals. This is according to new research published today 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.    

According to 73% of Gen Z, the current economic environment has made it more challenging to save. 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. 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. "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."