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May 27, 2021

Concerned parents struggle to help adult children

Who says you can't go home again?

Move Today's young adults study longer, marry later, and earn their own keep more slowly than the previous generation. And when they do eventually leave, they come back - sometimes more than once - after university, between jobs, or after a divorce.

Still, it’s a bit surprising to hear that 59 per cent of parents are providing support to their adult children, ranging in age from 18 to 39 … yes, that’s a 3 … , according to a recent National Endowment for Financial Education study.

Not wanting to see their children struggle, the majority of parental assistance extends to housing, living expenses and transportation costs. Concerned parents are also offering assistance for insurance coverage and medical bills.

According to the survey, here’s how the family wealth transfer breaks down:

  • 50 per cent are providing housing
  • 48 per cent are helping with living expenses
  • 41 per cent are aiding with transportation costs
  • 35 per cent are providing insurance coverage
  • 29 per cent are handing out spending money
  • 28 per cent are helping with medical bills

For some parents, it’s been a devastating sacrifice as they give up privacy, face delayed retirements and take on more debt.

Thirty percent say they have much less privacy since their adult children moved back home; 26 per cent have taken on additional debt; 13 per cent have held off on buying a home or taking a vacation; and 7 per cent have delayed retirement.

“Parents are continuing their financial involvement longer than we expected,” says NEFE president Ted Beck. “The general sentiment is that financial pressures are higher for this generation. But if parents are going to financially support their adult children, they should first have a serious talk about their kids’ expectations so that everyone protects their financial futures.”

It’s not all a one-way street, however. More than half of these boomerang kids are chipping in money for groceries, putting gas in the family car or paying the cable bill. Roughly 42 per cent are contributing in nonfinancial ways as well, such as cooking or cleaning, or taking care of younger siblings.

Those young adults are also expecting to repay their parent's goodwill as they grow older and begin needing more help themselves, New York-based psychologist Vivian Diller, tells Forbes.

We'll see.

Any of this sound familiar? Has adult children moving back home had an impact on your financial life? How are things working out now?

By Gordon Powers, MSN Money

* Follow Gordon on Twitter here.






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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

James HaversJames Havers

James is the senior editor of MSN Money living in Toronto. He has worked for the Nikkei Shimbun (Tokyo), canoe.ca, AOL.ca, Canadian Business and other publications. Havers turned to journalism after teaching overseas.

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...