According to a recent survey by USA Today, nearly half of adult American children are receiving financial support from their parents. This includes sending money and paying bills, as well as many young to middle-aged adults still living at home or moving back in with their parents. This shift in mindset towards adults relying on their parents for financial assistance raises the question of whether this change is a cultural shift or a result of the challenging economy young Americans are facing.
The survey found that 29% of Gen Z adults between 18 and 25 are living at home with parents or other relatives as a long-term housing solution due to the soaring cost of living across the country. A recent study by Savings.com revealed that almost half of parents in the United States support their adult children financially, with the average age of adult children still receiving financial support being 22.
Most parents believe their kids should be financially independent by age 25, but many continue to provide financial assistance well past this milestone. The study found that parents are financially supporting millennials and Generation X children, with the average monthly financial aid ranging from $907 to $960. For Generation Z children, parents are providing an average of $1,515 per month to cover expenses such as groceries, cellphone bills, rent, mortgage, tuition, and health insurance.
The study’s authors attribute the trend of adult children relying on their parents for financial assistance to a mix of socioeconomic factors. Rising housing costs and other economic factors make it challenging for young adults to achieve financial independence. Rent and cost of living have significantly increased in recent years, making it harder for young adults to make it on their own.
Parents’ desire to provide a better life for their children than they had, coupled with the financial challenges young adults face, leads to parents contributing more to their adult children’s finances than their retirement accounts each month. This support could have long-term consequences, as some adult children may need to financially support their parents in the future, creating a cycle of financial dependence.
The study also highlighted decreasing trends in key family milestones, such as marriage and having children, among adults aged 18 to 34. These trends may be influenced by the financial support provided by parents and the difficulties young adults face in achieving financial independence. The challenges of finding a partner and starting a family while relying on parents for financial support add additional complexities to the situation.
