The news: Roughly two-thirds (64%) of Gen Z consumers have cut spending in the past year due to higher living costs, according to an April Ipsos survey for Bank of America.

• 41% have switched to a more affordable grocery store.
• 23% are cutting back on dining out.
• 18% have started budgeting, while 12% have taken on a side hustle to earn extra income.

Feeling the strain: The data underscores the financial pressures facing Gen Z.

• While only half of Gen Zers pay for their own housing costs, those expenses are draining budgets: 63% of Gen Zers who pay for their own accommodations devote at least 31% of their monthly paycheck to housing, and 1 in 4 spends over 51%.
• 1 in 3 Gen Zers reports feeling financially stressed, citing economic instability, falling short of financial goals, and insufficient income to cover needs and/or obligations.

Small indulgences: Despite—or perhaps because of—these pressures, Gen Zers are especially inclined to cheer themselves up with retail therapy.

• Nearly 3 in 5 (59%) Gen Zers use retail therapy as a mood booster, per a June LendingTree survey.
• Nearly the same proportion (57%) treat themselves weekly, per Bank of America, with 24% doing so daily or multiple times per week.

While that benefits TikTok Shop, Shein, and other brands, those purchases add up fast—and could lead to a pullback later in the year once the impact of tariffs is more fully felt.

The big picture: Uncertainty is beginning to shape Gen Z’s purchasing decisions. Brands will need to work harder to earn their dollars—possibly by appealing to the generation’s tendency to shop for emotional relief.

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