Nearly 60 percent of parents help support adult children
A new study shows that 59 percent of parents are still providing financial support to their adult children who are not students. The study suggests that the recession is preventing them from leaving home. In some cases, it is forcing those who have left to move back — so called “boomerang kids.” The study, called the Harris poll, was conducted online for the National Endowment for Financial Education and ForbesWoman last month. The study polled 1,074 U.S. non-students ages 18 to 39 and their parents.
Pressure higher for this generation
Ted Beck, president and CEO of NEFE, a nonprofit financial education group, said “Parents are continuing their involvement longer than we expected. The general sentiment is that financial pressures are higher for this generation.”
Parents and the young adults surveyed agreed. Sixty-five percent of the adult children said their generation faces tougher financial pressure than their parents did. And 32 percent of their parents agreed that they had it easier than their children do. Further, 43 percent of parents said they were providing support because they were “legitimately concerned” about the finances of their children. Another 37 percent said they did not want their children to struggle in the same way they had to.
How it breaks down
The lion’s share of parental support, at 50 percent, is in housing. Living expenses account for 48 percent of parental financial support. Transportation costs make up 41 percent of parental aid.
Among adult children living at home, 75 percent say they are helping out financially, and 42 percent say they are contributing in non-financial ways, such as cooking and house work.
Other factors involved
Psychologist Vivian Diller, the author of “Face It,” believes that the economy is not the sole factor in this trend. “In the last 20 to 30 years, the family structure has become more child-centered,” she says. “Boomer parents were very willing to make sacrifices for their kids, giving them the sense that it would continue until they were on their feet. Now parents are supporting kids’ lifestyles.”
But, she warns, continued financial support could have negative consequences. “Because they have been protected, some children don’t learn reasonable ways to manage money, and they run into trouble.”
Pitfalls of parental sacrifices
Thirty percent of parents surveyed say they have given up privacy because of adult children moving back home. And 26 percent have admitted to taking on additional debts. Another 7 percent say they have been forced to delay retirement.
“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,” Ted Beck says. “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.”