Half of parents in the U.S. are providing financial support to their adult children, according to a new report from Savings.com. The survey found that 50% of parents with a child over 18 are giving them some form of financial assistance, up from 47% last year and 45% in 2023. On average, these parents are spending about $1,474 per month to help their grown children, a three-year high.
The support covers various expenses, from groceries and cell phone bills to rent and health insurance. “Adulting is expensive,” the report notes, highlighting the financial challenges faced by many young adults today. Experts point out that Gen Zers and millennials often have lower earnings compared to their parents at the same age, after adjusting for inflation, while also carrying larger financial burdens.
Despite this, the report found that young adults are doing well in some aspects. Compared to their parents at the same age, Gen Zers are more likely to have a college degree and work full-time. Many millennials have also managed to build up more savings in recent years, thanks to positive market conditions.
Parenting financial impacts
However, the financial support from parents comes at a cost. The study revealed that more than 60% of parents have sacrificed their own financial security for the sake of their children, a significant increase from previous years.
Carol McClanahan, a certified financial planner and founder of Life Planning Partners in Jacksonville, Florida, noted that housing is a major issue, with parents increasingly helping with rent and home purchases. Financial advisors generally recommend that parents prioritize their own retirement and emergency funds before providing financial assistance to their adult children. McClanahan suggests setting parameters to ensure that the money is being used wisely.
The report also found that 18% of parents supporting adult children said the financial contributions could continue indefinitely. “They don’t see an end in sight,” said Beth Klongpayabal, the study’s lead data analyst. As the debate surrounding this issue continues, policymakers and financial advisors are considering the long-term impacts on both parents and their adult children.
The discussion raises important questions about financial independence and the changing dynamics of family support in today’s economic landscape.
Image Credits: Photo by todd kent on Unsplash
