Rising prices are causing Gen Z to reduce spending and dine at home.
Over the past year, 73% of Gen Zers say that they’ve changed their spending habits due to increased prices, according to the Bank of America’s Better Money Habits survey.
These lifestyle changes include cooking at home more often instead of dining out (43%), spending less on clothes (40%) and limiting grocery purchases to essentials (33%). Nearly all those who adopted new spending habits plan to maintain them over the next year even as inflation slows, the survey showed.
Additionally, a third of Gen Z reported experiencing a financial setback, forcing them to either stop saving or accumulate more debt.
“Gen Zers are definitely looking for ways to improve their financial health,” Holly O’Neill, president of retail banking at Bank of America, told Reuters. “They are proactively making lifestyle changes to combat inflation.”
The generation is also feeling less confident in the economy as a whole, with 32% feeling confident the job market will improve, compared to 46% in 2021, and 26% confident the housing market will remain strong, compared to 32% in 2021.
While Gen Z may be cutting back on spending, older generations are spending more.
According to Bank of America data regarding credit and debit card spending per household, Gen Z spending declined by over 2% between May 2022 and May 2023, while spending increased by 2.5% (Boomers) and 5% (Traditionalists, those born prior to 1945).
“Consumer repayments still remain strong,” O’Neill added. “From a delinquency perspective, we are still not where we were pre-pandemic. Even though there has been a change in spending and payment behavior, the consumer is still very healthy.”
Read the article “Generation on the Rise” in NACS Magazine to understand Gen Z and what and how they want to buy in today’s economy.