- 31% of parents with children over the age of 18 are currently supporting their children financially
- 69% of the parents who financially support their adult children say it causes them financial stress
- Nearly a quarter of parents who financially support their adult children say they provide them with a regular allowance or checks (24%)
Gone are the days when parents only covered their kids’ cell phone bill. Now, with mounting student loan debt, persistently-high inflation and an uncertain economy, many parents are having to financially support their adult children beyond just the basics – and it’s starting to have a negative impact on their mental and financial well-being.
According to a study conducted by Qualtrics on behalf of Credit Karma, 31% of parents with children over the age of 18 say they currently support their adult children financially. Of those who provide financial support to their adult children, more than half say they do so by allowing their kid(s) to live at home (51%), while another 48% say they pay some or all of their monthly bills, including cell phone, utilities and car payments. That’s not all, though. Nearly a quarter of parents who financially support their adult children say they provide them with a regular allowance or checks (24%), pay some or all of their rent (23%) or have them as an authorized user on their credit card (20%).
As a result, many parents supporting their adult children are starting to feel the impact on their own finances. According to the study, 81% of parents who financially support their adult children say it impacts their finances in a number of ways. For some, they feel like it impedes on their lifestyle (50%) and forces them to cut back on their current living expenses (49%). For others, it limits their retirement savings (41%), forces them to work longer and prolong their retirement date (30%) or even take on debt (25%).
The financial ramifications of caring for their adult children is weighing on the mental and financial stress of parents in the US. According to the study, 65% of respondents who care for their adult children say it causes them mental stress with another 69% saying it causes them financial stress. What’s driving that stress? Inflation (56%), a lack of general savings (52%) and debt (41%) are the main stressors heightened by financially supporting their adult children. However, for some, providing financial support to their adult children is making it harder to afford necessities, like groceries, gas and rent for themselves (29%).
When asked why they continue to financially support their adult children, many say they do so because it’s their duty as a parent (45%). Other reasons include inflation and the rising cost of living (39%), their adult child being unable to find sufficient employment (31%) and rising rent prices (18%).
“What used to be paying your kid’s cell phone bill every few months has now turned into a much more extensive set of expenses for many parents,” said Courtney Alev, consumer financial advocate at Credit Karma. “And, while this feels like a necessary and important expense, it’s essential that parents do what they can to first take care of themselves financially, before offering financial support to their adult children.” Like with anything, make a budget for your income and expenses, factoring in savings, debt repayment and, if possible, contributions to a retirement fund. Once you’ve done that work, see how much you have leftover to feasibly help your adult kid(s) and set that expectation with them. You might even consider setting an expiration date to give your adult children a timeline for when they need to be back on their feet.”
Methodology
This survey was conducted online within the United States by Qualtrics on behalf of Credit Karma from October 26-31, 2022 among 1,008 adults ages 18 and older.
###