Why Gen Z is saying ‘no’ more often – and saving more money

Young Americans are working to save money for their future goals and retirement despite housing costs straining their budgets, a new report finds.

Bank of America on Tuesday released its latest Better Money Habits study of how adult members of Gen Z are handling their finances in adulthood. It found that Gen Z is getting more financially independent, with just 34% receiving financial assistance from parents or other family members – down from 39% in 2025 and 46% in 2024.

“We view that as extremely positive – more saving, less reliance on family members to get by,” Will Smayda, head of financial centers at Bank of America, told FOX Business. “It turns out, adulting is hard, and it’s expensive.”

Gen Z has also been at the forefront of the “loud budgeting” trend, with 42% of respondents saying they’re comfortable declining social opportunities and admitting they can’t afford to participate – a figure that’s unchanged from 2025 and remains up from 38% in 2024.

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“They’re loud about spending habits, comfortable saying no to certain expenses like travel or a lavish night out at a restaurant,” Smayda said, adding that the loud budgeting trend is quite a bit different. “Frankly, I think, healthy when folks are open about the way in which they save, and about the way in which they spend, and the fact that sometimes you make hard decisions.”

Smayda noted that 75% of respondents said that they were actively looking for ways to spend less money, especially in their social lives when making plans with friends by suggesting free or lower-cost activities, ordering cheaper menu items or fewer drinks, as well as other strategies.

The trend is more prominent among those in the middle of Gen Z between the ages of 23 and 25, as well as the older cohort of 26 to 29-year-olds.

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“I love the fact that saving and making tough decisions is something that this generation is comfortable talking about publicly, and it reinforces positive behaviors. Saying no to something is a positive behavior,” he said. “It might hurt a little in the short-term, but it definitely helps people stay on track.”

“We remind our clients and our Gen Z in particular, that they have to balance near-term treats, if you will, with long-term savings. The cost of homeownership continues to go up, and it continues to be one of the most important and achievable ways of building wealth out there in the world for everyone. So we continue to make sure that there are strong, regular, in many cases digital, savings habits,” Smayda said.

While Gen Z is becoming increasingly independent, they continue to seek validation for their purchasing decisions, with 40% of Gen Z seeking validation from family or friends – compared with 26% of millennials, 20% of Gen X and 15% of baby boomers. Of the Gen Z members who do so, 18% seek validation ahead of purchases, 8% do so afterward and 14% do so both before and after they purchase.

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A rising proportion of Gen Z is saving money, with Bank of America’s Better Money Habits report finding 66% are currently saving – up from 63% last year and 60% in 2024. Among Gen Z savers, 36% put leftover money into savings when possible, while 22% contribute to a 401(k) retirement account and 22% also reported the use of a high-yield savings account.

High housing costs have been a notable challenge for members of Gen Z, as the report found that 29% of Gen Z respondents said housing costs are a top barrier to their financial success – a figure that’s little changed over the last four years. It also found that 17% reported spending more than half of their paycheck on housing.

“That’s up quite a bit,” Smayda said, noting it was one of the most concerning data points in the report as it rose from 13% in 2025 and 10% in 2024.

“If you’re putting a dramatic amount of your total income into housing, it squeezes other parts of your financial life – it squeezes your savings and obviously, maybe less importantly, your discretionary spending, your fun spending if everything’s going to rent or to a mortgage,” he explained.