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BofA flags Gen Z “little treat economy” as a drag on savings
A Bank of America Institute study ties Gen Z's lower savings-to-spending ratio to higher spend on beauty, jewelry, coffee, and travel, with homeownership milestones potentially feeling further away.
A Bank of America Institute study, highlighted by Yahoo Finance, argues that Gen Z’s “little treat economy” is contributing to the lowest generational savings-to-spending ratio, driven by spending on items such as beauty, jewelry, coffee, and travel.
The report suggests that financial stability is still a goal for younger consumers, but they are less willing to pause spending while waiting for ideal conditions. It also says traditional milestones like homeownership may feel more distant, shaping how Gen Z balances today’s experiences with longer-term goals.
According to Yahoo Finance, Bank of America Institute economist Taylor Bowley said Gen Z invests in experiences and personal well-being now while searching for ways to fund future objectives. It also notes that younger workers face a higher unemployment rate than the U.S. average, and that Gen Z increasingly relies on additional gig work to support spending priorities.
The story adds context by pointing to cost-of-living increases, stagnant wages, and economic uncertainty as factors that help explain why cutting back on frequent purchases, such as coffee, may still leave Gen Z far from saving enough for a home.
Latest closeCoffee $312.00 ▼6.3%