Gen Z still needs parents' support

With the arrival of 2024, even Gen Z is coming of age. The generation, born between 1997 and 2012, now sees more than half of its members reaching adulthood. In an ideal world, this would mean that most of them are already active in the workforce or completing their studies. However, the Italian reality paints a different picture: long and frustrating job applications, a steadily declining employment rate, and monthly average salaries that hardly exceed a thousand euros. These data points do not align with Gen Z's desire to live in major cities; while Millennials prefer smaller and more livable cities, Gen Z continues to flock to metropolises - yet the cost of urban living far exceeds the average incomes of the generation. The issue is so unsustainable that many find themselves needing external assistance: from their parents.

According to a recent report on Gen Z's financial habits by Bank of America, 52% of respondents report that the main economic challenge is the gap between their ideal lifestyle and their salaries, given the continuous increase in the cost of living. While their parents at the same age aimed to buy a house or make significant investments, 32% of Gen Z cannot afford such goals. In Italy, we face rental expenses that amount to half of the salary in major cities, not to mention bills and essential goods. According to the American study, the only solution for the younger generation often remains being financially dependent on their parents, with 54% of respondents still receiving financial support from their families. This money is not spent on luxury items - not on avocado toast as assumed by Boomers - but helps young workers cover food, bills, and medical expenses. Another important consideration from the study is how rigorously Gen Z manages daily expenses: from shopping at discount supermarkets to declining social events and dinners out. More than a third of respondents stated they have no issues rejecting friend invitations due to financial reasons.

While the results of this report may suggest a bleak reality, one of the most prevalent financial trends this year is the phenomenon of "loud budgeting", where Gen Z has set strict goals not only to survive until the end of the month but also to start accumulating savings. From skipping breakfast outings to not frequenting nightclubs every weekend, loud budgeting emphasizes honesty in saying no to social situations that could jeopardize personal finances, thus breaking the taboo surrounding a topic often considered taboo. Compared to Baby Boomers and Gen X, Gen Z lags behind financially, but stands out for its emphasis on the balance between work and personal life, so much so that it surpasses the traditionally most coveted goal by their predecessors: material wealth.