Concerned parents struggle to help adult children
Who says you can't go home again?
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.
Posted by: Troy Jollimore | May 27, 2021 9:41:25 AM
Is this really surprising? Given that the Baby Boomers (and partially GenX) were led to believe they were working for a better life from the '50s onward, and even though GenX and GenY are making more than their parents ever did, they're just barely making ends meet! The ratio of costs to expenditures is WAY above what their parents faced, and their parents, usually sitting on a good-sized nest egg, only want to try helping their kids. But it's throwing their money away.
When you look at the growing gap between the 'Rich' and the 'Poor' (note I don't include a Middle Class, because that's pretty much gone), the income and net worth disparities between the millionaires (which you almost HAVE to be, to be considered 'successful' these days)...these people are paying for their luxurious lifestyles on OUR shoulders! The difference is that in the 'old days', if times were tough the rich would tighten their belts and ride it out with the rest of us. Now, they do everything they can to keep their net gains rolling in. They ignore, or just don't realize, the impact it has on US, which will rebound back to THEM.
The system is broken, but not even the 2009 crash seems to have made them realize it. Now the governments seem to be talking about undoing the work our parents did for us, and moving back towards the feudal systems of old. Only the super rich 'own' property and goods. Everyone else will only be allowed to pay through the nose for the privilege of leasing or renting...
Posted by: brian | May 27, 2021 3:22:00 PM
I couldn't agree more with Try Jollimore, if we do not get a grip on the politics in the democracies, we are doomed.
Posted by: Dee | May 27, 2021 6:13:06 PM
As soon as I was able, 4 months after turning 18, I moved out of my parent's place so I could say I was able and I didn't end up another statistic to end up on a list like this one :/
Posted by: Chip | May 28, 2021 8:12:45 PM
Fly... be Free !! Make something out of your life !! Assume some responsibility !! Learn to stand on your own 2 feet !! Ooops... not these days it seems. Keep spoon feeding 'em, adjusting their bib, doing their laundry, cooking their meals, paying their cellphones, internet and other bills and the little squawkers (and their own offspring) will be more than happy to keep sucking at the parental teat and will stay in the nest until they're collecting an old age pension. Ohhh, and make sure you don't skrew them out of their inheritance... aka entitlement.
Posted by: Shawn | May 29, 2021 3:57:21 PM
I find with my generation we are so straddled by debt we cannot create that shift. I asked my grandparents what kind of debt they had when they were my age and they had nothing! We are so worried about not making ends meat if we have to suffer a bit of change we don't and we cannot support this lifestyle with all the debt we carry. So we go back to what we know it's not what we want to do but what we have to do sadly :( . As far as I am concerned slavery had balls and chains and this new generation has debt till we die!
Posted by: Arlene | May 29, 2021 4:10:03 PM
My son is still at home and it has become painfully aware to both of us that I need him financially just as much as he needs me, it's not easy being single and owning your own home and having car payments ect....with him here I can afford to go on holidays and drive a nicer vehicle than if I were on my own. My debt load has been cut almost in half!!
Posted by: SMS | May 29, 2021 8:29:29 PM
It's never the kids who took the most from their parents who end up helping in them in their old age. It's the responsible kids who made their own way who end up taking on that burden. The irresponsible, spoilt ones continue to be irresponsible and entitled all their lives.
Posted by: Dee Kayel | May 29, 2021 11:17:06 PM
When my daughter was born, my wife and I had an unspoken agreement that we were going to give her everything we could for a very simple reason. She did not get to vote on her being brought in this world. It was my decision and my wife's decision to have a child...to have her. So we took it as our responsibility to give her the best that we could provide...private school, ballet, piano, soccer, anything and everything she wanted. But it is not the material things that are important. It is the love that you give your child that stays with them for the rest of their life. It is what you got from your parents that you give to your child.
My daughter got her Master Degree without a penny of student loan. Scholarships and grants coupled with our two mortgages got her to where she wanted to be and is now on her way to her Doctorate Degree.
We continue our financial involvement with her living expenses, transportation costs, insurance coverage, spending money, medical bills, etc.
At 71, I still work full time and if I have to do it again, I will do it exactly the same way.
Parents, love your children unconditionally. What goes around, comes around.
Posted by: Albertan | May 30, 2021 2:37:21 PM
Getting started now is tough. A small difference now can add up to a large difference in the future if it is properly managed.
I got my start 7 years ago now. I had just graduated from university and was entering the work force. I had just started renting a place and was looking around at a place to buy. There was some new buildings going up but they required 5% down ($8,000) with another 5% 1 year later when they were completed. As I was just starting this was out of reach for me. My parents became aware of the opportunity I had and after looking it over basically told me I had to do it and that they would put the 5% down if I saved the other 5% in the 1 year's time. This gave me the seed money to start.
Today I have over 2 million in real estate and a networth of almost 500K at 30 with it increasing over 20% a year with no end in sight. I make good money but most of my wealth has come from my property investments. I live the lifestyle I want and know that my retirement is going to be secure and solid.
So should parents have to constantly fund their 20-30 year olds. My thoughts are no. If that is the case then the child didn't pick the right career (why choose something that will mean you will starve)? Can a little kick in the right direction make all the difference in their early twenties, a resounding yes.
Posted by: nikkieB | Jun 6, 2021 4:44:32 AM
A new study shows that fifty nine percent of mothers and fathers are still sometimes providing financial assist to their adult kids who are not students. The research concludes the tough economy is stopping them from moving away from home. Some of them are turning into so-called "boomerang kids," by leaving home and returning again. Nearly 60 percent of parents help support adult children, personalmoneystore.com/moneyblog. We all want to ensure the best for our children. But if you are taking on extra debt or delaying retirement to help your adult child, you could be making a mistake and putting your own financial future in jeopardy. Since it shows that adult children are becoming dependent on their parents and its not a good idea.