The growing trend of parents funding their adult children

The young adults of today (Millennials and Centennials) are continually facing financial struggles: with student loan debts, poor spending habits, inflation and low salaries, many of them have turned to their parents for help.

On average, parents providing financial support give $1,384 to their children monthly, the report shows, which is more than twice the average contribution to their own retirement savings ($609 on average).

Moreover, 58% of parents surveyed said they were sacrificing their own financial security to help their adult children.

Each situation is unique, but the most common costs that parents cover for their adult kids include groceries, rent, cell phones and health care, the report shows.

Photo: Bruce Mars/Unsplash

The study also found that 61% of adult children living with their parents don’t contribute to any household expenses, including rent.

But on the other hand, compared to their parents, millennials and centennials are more likely to have a college degree, although the increasing levels of education don’t seem to be enough to get a decent paying job.

Photo: Charles Deloye/Unsplash

A 60 year old father who gives $2,000 every month to his 29 year old unempoyed son, told The Guardian US his son has a degree in maths and data analysis, however his lack of work experience seems to be a problem.

With Silicon Valley nearby, which has had a lot of layoffs, his son is competing against many people with years of experience, the parent told The Guardian.

“Perhaps my son is doing something wrong, but it’s my impression that this economy is excluding a lot of qualified people,” he added.

Though many could relate to the experience of that father and son, there are also those young people who have a decent paying salary but ask for their parents help as their spending habits do not match their salaries.

Photo: Vitaly Gariev/Unsplash

Retired attorney Allen, 68, from Minnesota, was among a number of people who said they were propping their adult children up financially because they had money they did not need to spend.

But despite being comfortably able to support his daughter financially, Allen told The Guardian he had concerns about whether he and his wife were doing the right thing, as their daughter and her partner were earning decent salaries of about $150-170k annually combined.

“I don’t understand the spending and saving habits of the younger generation,” he said. “My daughter and her partner have well-paying jobs, but never seem to have any extra money. They’re always going out for coffee, going out for dinner, splurging on this and that.”

Photo: Austin Distel/Unsplash

For many parents, it is a joy to help their children at any age if they can do so. But, according to the parents surveyed by savings.com, only about a third think their support will help their adult child transition to financial independence, mainly due to a lack of established boundaries.

But whatever the reason for parents helping out their adult kids or even letting them live with them, and whatever their specific arrangements, the situation has become an international phenomenon.

In the UK, at least 620,000 more grown-up children are now living with their parents than a decade ago, according to National Statistics.

While according to the most recent data from Statistics Canada, in 2021, 35.1% of Canadian young adults under the age of 34 lived with at least one of their parents.

The reasons that young Canadian  adults gave for living with a parent, were mainly unaffordable housing, while others say it’s a temporary thing that will allow them to save enough money to make it on their own, according to a CBC article.

A mix of socioeconomic factors has created this situation, a challenge in today’s economy. It’s clear that governments have to come up with policies that will let young people afford housing and healthcare and old people have a comfortable retirement without worrying about their children.

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