Budget Tools Have a New Fan Club: Gen Z

The financial landscape for American consumers is a challenging one, with a record 68.4% living paycheck to paycheck as of May, and nearly a quarter struggling to pay their bills.

PYMNTS Intelligence found in the  latest “Reality Check” report that factors such as persistent inflation, rising housing costs, and tariffs contribute to widespread financial anxiety, with 6 in 10 consumers feeling uncomfortable when contemplating their financial situation.

The stress underscores the need for solutions that help individuals navigate their personal finances.

While advanced budgeting apps and personal finance tools cannot magically deposit extra money into bank accounts, they offer a powerful antidote to financial angst, helping consumers achieve worry-free and stable financial standing, particularly during difficult economic times.

These specialized tools — including expense trackers, financial advisers, and apps like Intuit’s Credit Karma, YNAB (You Need a Budget), and Quicken Simplifi — are distinct from basic bank apps or simple spreadsheets. They enable users to identify and reallocate funds from wasteful or inefficient spending, effectively unlocking additional dollars.

Profound Impact

The impact of advanced budgeting on financial comfort is profound. Among consumers who struggle to make ends meet, more than half (over 50%) who use advanced budgeting tools report feeling financially comfortable. This stands in stark contrast to only 12% of those using rudimentary tools and virtually none who do not budget at all.

Overall, nearly half of advanced budgeters (47%) feel comfortable with their finances, compared to basic budgeters (34%) or non-budgeters (39%).

Even individuals living paycheck to paycheck and struggling with bills report higher financial comfort (53%) when using advanced tools, a rate several times greater than their basic budgeting or non-budgeting counterparts.

Who are these advanced budgeters? They represent 37% of consumers. Consumers with household incomes exceeding $100,000 per year are more likely to be advanced budgeters, at 45%, compared to 27% of lower-income individuals. Younger generations also show a greater propensity for advanced tool adoption, with Gen Z leading at 55% and millennials at 48%.

The Daily Nudge

A simple yet highly effective feature that boosts financial comfort is the daily budget reminder.

About 54% of consumers who receive daily nudges from their budgeting tools feel comfortable about their finances, a rate that plunges for those receiving fewer reminders.

Another 25% of individuals struggling to pay their bills opt for daily nudges, a much higher rate than other respondents, and millennials are the most likely generation to use them (24%).

Daily reminders are a testament to how consistent engagement with one’s financial health can bring peace of mind.

Despite the clear benefits and consumers’ expressed desire for budgeting capabilities and the peace of mind they offer, these advanced tools are woefully underused.

Only 14% of consumers opt for daily reminders, and 40% receive nudges less than once a month or not at all.

This underuse presents an opportunity for financial service providers. By promoting and integrating advanced budgeting tools — and critically, educating consumers on how to leverage features like daily reminders — institutions can empower their customers to take proactive control of their finances.