A new study revealed that nearly half of parents are still financially supporting their adult children due to the economic changes in the United States.
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According to CNBC, a report by Savings.com revealed that nearly half (47%) of parents with children over 18 years old are helping their children financially. This support covers a range of expenses, from groceries and cellphone plans to health and auto insurance, amounting to an average of $1,384 per month. Despite these financial hurdles, young adults are faring better than their predecessors in some areas. Generation Z, in particular, is achieving higher levels of education and engaging in full-time work more frequently than their parents did at their age. This is especially true for women pursuing higher education in more significant numbers and earning more.
“Despite a general improvement in the economy in recent months, the practice of parents financially supporting their adult children has not decreased since our previous study. This may indicate that the economic recovery, evidenced by high employment, falling inflation, and economic growth, hasn’t reached young Americans unwilling or unable to wean themselves off their parents’ help. The most common generation of young adults to receive parental help was Generation Z (ages 18-27), the youngest adult generation. The median age for adult children receiving financial help was twenty-two.”
Savings.com also reported that 61% of adult children living at home do not contribute to household expenses. This scenario places parents in a precarious position, particularly as they approach retirement. Indeed, 58% of parents admit to compromising their financial security to support their adult children, a significant increase from the year before.
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Financial experts advise parents to approach this dilemma with caution. Carolyn McClanahan, a certified financial planner, emphasizes the importance of parents securing their financial future first. She suggests that they budget their support for their children within the constraints of their retirement plans and other financial goals. She advocates for setting clear boundaries and a timeline for this support.
