As young American adults continue to struggle with rising costs of living, Gen Z and Millennials are not only losing friendships but putting a strain on those with their families. Parents of young Americans say they are continuing to foot the bill — even as it negatively impacts their own mental and financial well-being.
According to a new survey conducted by Qualtrics on behalf of Intuit Credit Karma, it’s not always easy for parents to know when to stop supporting their children, feeling “a sense of duty and empathy” toward their children. The survey found that 32 percent of parents with children over the age of 18 are currently providing financial support.
Of parents providing support, 64 percent are doing so by allowing their children to live at home while almost half say they are paying some or all of their monthly bills (which often include cell phone, utilities, food and car payments) and 23 percent report they pay some or all of their kids’ rent, even providing regular allowances or checks.
As a result, consumer behaviors of both parents of adult children and their children are being impacted. For most parents who financially support their adult children (76 percent), there is a toll being taken on their own finances with 52 percent reporting they have had to cut back on current living expenses and 38 percent reporting that it “impedes on their lifestyle.” Another 34 percent admit that providing support has resulted in them taking on debt while 29 percent say it has limited their retirement savings and 27 percent have prolonged their retirement.
Notably, almost 40 percent of parents providing financial support to their adult children say it is making it harder for them to afford necessities such as bills, groceries and rent.
“Achieving financial independence as a young adult can be challenging, especially as they face high housing and education costs,” said Courtney Alev, consumer financial advocate at Credit Karma. Acknowledging the huge strain on finances for both parents and their adult children today, she pointed to the negative impact that providing financial support is also having on parents’ finances. “You can also consider other ways — that may have less impact on your wallet — to help your child achieve their financial goals, such as adding them as an authorized user to your credit card so they can build their credit or allowing them to live at home if they help around the house or pitch in on groceries and utilities.”
Even as parents feel their own financial struggles grow when helping their adult children, more than half say they do so because it is their duty as parents. When prompted, these parents cited today’s high cost of living (42 percent), an unfriendly job market (33 percent) and rising rent prices (23 percent) as reasons for the need.
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