Report Reveals: Half of Parents Still Financially Support Adult Children, Costing Them a Fortune

To manage these times, many young adults rely on what might be considered a probable resource: their parents.

For the first time, half of the parents who have a child over 18 years old offer their children some form of financial assistance, as indicated by recent data. report by Savings.com That has increased from 47% last year and 45% in 2023.

Whether it’s purchasing groceries, settling the phone bill, handling health and car insurance costs, or perhaps tackling rental payments, the study reveals that these parents are coughing up approximately $1,474 monthly on average — marking a peak over the last three years.

The report observes, “Being an adult comes with significant costs.”

Numerous specialists contend that it has become more challenging nowadays for young adults to do it independently .

In addition to soaring everyday expenses and housing costs , millennials and Generation Z face other financial challenges Their parents were not at that age.

Not only are their wages lower than what their parents earned when they were in their 20s and 30s, adjusted for inflation. However, they are also burdened with higher debts. student loan balances , many reports show .

However, using different metrics, young adults are faring well.

When compared to their parents at the same age, members of Generation Z are more inclined to have a college degree and they work full-time. Additionally, numerous millennials shoulder more saved for retirement Then they experienced this phenomenon only a few years back, having benefited from favorable market circumstances.

Yet, roughly 1 in 3 According to U.S. Census Bureau data, adults between the ages of 18 and 34 reside in their parents' homes.

"Housing is a significant concern, and increasingly, parents are assisting with rent payments and home purchases," he mentioned. Carolyn McClanahan , a certified financial planner and the founder of Life Planning Partners based in Jacksonville, Florida.

Sixty percent of mothers and fathers jeopardize their personal economic stability.

Apart from the regular monthly expenses, aiding adult offspring might also incur significant long-term costs.

Over 60% of parents reported that they have compromised their personal economic stability to support their offspring, marking an increase compared to earlier years, according to Savings.com. The website surveyed over 1,000 parents with grown-up children in February.

Moreover, approximately 18% of parents who provide financial support to their grown-up kids mentioned that these contributions might extend without an end date.

Beth Klongpayabal, who led the study as its primary data analyst, stated, “They do not foresee an ending anytime soon.”

In general, McClanahan advises setting aside funds for your retirement and emergency savings before anything else. Additionally, she recommends parents establish guidelines to assist in ensuring their children use gifted money responsibly.

"We take precautions to ensure that parents do not give too much, putting themselves at risk," said McClanahan, who is also a member of CNBC’s Advisor Council .

The article was initially posted on GudangMovies21