A recent survey found that nearly half of all adult American children receive financial support from their parents. Financial support ranges from sending money to paying bills to many young and middle-aged adults who still live at home or move back in with their parents.
To many of us, myself included, this seems like a bizarre construct. It was made clear to me ever since I started high school that the expectation was that I would no longer live with my parents once I graduated, let alone receive financial assistance from them.
Of course, it would never have occurred to me to stay home after graduation because I was eager to move away from my parents and forge a life for myself. But is the recent shift in mindset a cultural shift or is it related to the economy that young Americans are forced to deal with?
A helping hand?
According to a recent study by Savings.com, nearly half of parents in the United States support their adult children financially. The average age of adult children still receiving financial support from their parents is 22.
Of the 47% of parents who pay the bill in some way for their adult children, the majority said they believe their children should be financially independent by age 25. However, many parents interviewed continue to support their children well beyond this proposed milestone.
Across generations, 21% of parents financially help Millennial children (ages 28 to 43) or Generation X children (ages 44 to 59). On average, the amount of financial aid given to these two generations varies between $907 and $960 per month.
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The rest of the parents care for Generation Z children (ages 18 to 27), at an average cost of $1,515 per month. Financial assistance covers a variety of expenses, of which the following list is the most common:
- grocery shop
- cell phone bills
- rent
- mutual
- lessons
- health insurance
So, what is driving this trend in financial assistance for adult children?
Not so clear
The study’s authors explain why adult children seem to drain away from their parents. They write:
“Driven by a twisted mix of socioeconomic factors, adults receive help from their parents into their twenties, thirties and beyond.”
Being a millennial, I frankly couldn’t imagine receiving financial assistance from my parents. I have always been proud to know that since I was 18 I have been 100% financially independent.
Right; As a 41 year old woman, I have been paying my own bills, buying my own things, and providing shelter since I was a legal adult. However, the world looks very different now than it did when I was 18.
The survey explains:
“For some, it is tempting to simply say that today’s young adults are just trippers and that a strong foot in the rear will launch them into normal, independent adulthood. This may be rewarding for parents tired of paying the bill, but it does not adequately address or describe the economic factors at play, such as rising housing costs.”
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It’s true that rent today is significantly higher than when I was young, more than twenty years ago, and the cost of living in general hasn’t improved either. The U.S. Department of Agriculture expects food prices to rise 3%, while grocery store prices are expected to rise an additional 1.6%.
It’s just not as easy as it was when I was young and alone, to make it when you’re… well… young and alone.
Hidden cost
I believe that the goal of most parents is to provide their children with something more than their parents were able to do for them. When my husband and I talk about what we want for our children’s future, we have a constant theme: We want them to have it a little easier than we had it, but hard enough that they can forge their own path.
Depending on what our children decide to do once they reach college age, we may allow them to continue living with us. But where should parents draw the line, and what are the third- and fourth-order consequences?
The same study found that parents contribute to their adult children’s finances:
“…2.3 times more to support their adult children than they pay into their retirement accounts each month.”
This type of care could leave some parents and adult children in the opposite situation years later. A Pew Research Center survey found that 33 percent of adults ages 18 to 34 have, at some point, needed to support their parents financially.
For a time, my husband and I found ourselves part of this group known as the sandwich generation, supporting adult children and parents at the same time… a heavy financial and emotional burden to bear. The same Pew Research Center survey also found interesting declines in key family milestones.
In 1993, 63 percent of Americans ages 30 to 34 were married; today that percentage is only 51%. Furthermore, in 1993, 33% of adults aged 18 to 34 had at least one child; today, that percentage has plummeted to 27%.
It’s no wonder it can’t be easy to find a date, let alone procreate, while mom and dad pay the bills or, worse, still live with mom and dad.
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