As the high cost of living continues to affect young Americans financially, many are turning to their parents for help making ends meet. But even if parents/guardians of adult children are eager to help in today’s tough economy, many are risking their own financial future in the process.
More than 3 in 5 (61 percent) parents/guardians of children age 18 or older are currently sacrificing, or have sacrificed, financially to provide assistance to their adult children, according to Bankrate’s new Financial Independence Survey. Sixty-nine percent of Gen X parents (ages 44-59) of adult children say they’ve done or are doing just that, including sacrifices to their retirement accounts or emergency savings. That’s compared to only 56 percent of baby boomer parents (ages 60-78) of adult children.
Parents have been helping their children by paying everyday bills, giving them lump sums for big purchases or letting them live at home rent-free. Amid the high cost of housing, 49 percent of adults age 23 or older who say they currently receive or have received ongoing financial assistance from their parents received help with housing.
The struggle to decide whether or not to continue paying their children’s bills can be difficult for parents, not only emotionally but also financially. As long as Americans continue to have difficulty paying everyday expenses, young adults may turn to their parents for financial help, and parents need to consider whether they can afford it.
Housing costs and everyday expenses are the most common areas where adults are receiving, or have received, financial assistance from their parents. Persistent inflation and housing affordability woes make it unlikely that this will change any time soon.
— Greg McBride, CFA , chief financial analyst for Bankrate
Bankrate’s insights on financial independence
- Parental support is continuing into adulthood. 27% of adults at age 23 or older say they receive, or have received, ongoing financial assistance from their parents.
- Adults most commonly receive help with housing. 49% of adults at age 23 or older who say they’ve received ongoing financial assistance from parents/guardians received help with housing costs, including 37% who received rent payments or were permitted to live with their parents for reduced or free rent and 17% who received assistance with their first home purchase.
- Many parents are sacrificing their own financial future to help. 61% of parents with adult children age 18 or older are sacrificing, or have sacrificed, financially to help their adult children, including 69% of Gen X parents and 56% of baby boomer parents.
More adults today receive family financial support than their parents did
By age 23, many young adults have graduated college or begun working, but that doesn’t always mean they’ve stopped relying on their parents. Over 1 in 4 (27 percent) adults age 23 or older currently receive, or have received, ongoing financial assistance from their parents:
Source: Bankrate survey, April 15-17, 2024
Younger Americans are by far the most likely generations to have received help: 42 percent of Gen Zers (ages 23-27) and 42 percent of millennials (ages 28-43) receive, or have received, ongoing financial assistance from their parents at age 23 or older:
- Gen Zers over the age of 23: 42 percent
- Millennials: 42 percent
- Gen Xers: 22 percent
- Baby boomers: 10 percent
Additionally, men are more likely to receive, or have received, ongoing financial assistance from their parents at age 23 or older compared to women (30 percent and 25 percent, respectively).
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More people with college degrees carry additional expenses like student loan debt. Perhaps as a result, at age 23 or older, they’re most likely to receive, or have received, ongoing financial assistance from their parents:
- Post-graduate degree: 38 percent
- 4-year degree: 34 percent
- Some college/2-year degree: 29 percent
- No high school/high school graduate: 21 percent
Compared to other U.S. regions, Westerners, at age 23 or older, are most likely to receive, or have received, ongoing financial assistance from their parents:
- Westerners: 33 percent
- Southerners: 27 percent
- Northeasterners: 27 percent
- Midwesterners: 23 percent
Young adults most commonly get housing assistance from their parents
Parents’ financial assistance to their adult children can be more than just money wired to their checking account. Around half (49 percent) of people at age 23 or older who are receiving, or have received, ongoing financial assistance from their parents say they had help with housing costs. That includes 37 percent who had help with rent payments or permission to live with their parents for reduced or free rent. Additionally, 17 percent received financial assistance with their first home purchase.
Most commonly, 48 percent say they receive, or have received, help with everyday expenses like groceries and utilities. People also receive, or have received, financial assistance not designated for a specific purpose (33 percent) or help paying down/off debt (21 percent):
Source: Bankrate survey, April 15-17, 2024
Notes: Respondents could select more than one response; Percentages are of U.S. adults who received ongoing financial assistance from parents/designated guardians at age 23 or older.
Compared to other generations, millennials who say they receive, or have received, ongoing financial assistance from their parents at age 23 or older are the most likely (52 percent) to have gotten help with housing:
- Gen Zers ages 23 and older: 48 percent
- Millennials: 52 percent
- Gen Xers: 47 percent
- Baby boomers: 42 percent
How can I prepare to pay for my own housing?
If you want to move out of your parents’ house and live on your own, learning how to save will be a vital skill to prepare you not only for the move, but for any emergency expense you run into afterwards.
How to start saving
Southerners who say they receive, or have received, financial assistance from their parents at age 23 or older are most likely to have gotten help with purchasing their first home (23 percent), compared to people in other U.S. regions:
- Southerners: 23 percent
- Midwesterners: 13 percent
- Northeasterners: 13 percent
- Westerners: 13 percent
Parents of adult children are sacrificing emergency savings, paying off debt
Though many parents want to go above and beyond for their children, helping them with money sometimes stretches their own finances.
More than 3 in 5 (61 percent) parents of adult children age 18 or older are financially sacrificing, or have sacrificed, in order to provide financial assistance to their kids. Most frequently, that means sacrificing emergency savings (43 percent) or paying down/off debt (41 percent).
Parents of adult children also say they are sacrificing, or have sacrificed, their retirement savings (37 percent) or reaching some other milestone (44 percent):
Source: Bankrate survey, April 15-17, 2024
Notes: Percentages are of U.S. adults with children age 18 or older; Percentages in each bar may not total 100 due to rounding.
“Parents are least likely to sacrifice their retirement savings in order to help their adult children financially,” Bankrate Chief Financial Analyst Greg McBride says. “The fact that other financial milestones are first on the chopping block does suggest parents are appropriately prioritizing retirement savings — whether that is continuing to save or preserving what they’ve already saved.”
Gen X parents of adult children are more likely than baby boomer parents of adult children to make, or have made, a financial sacrifice for their kids (69 percent compared to 56 percent). Gen X parents of adult children are especially likely to sacrifice, or have sacrificed, their emergency savings:
- Emergency savings: 47 percent of Gen Xers versus 40 percent of baby boomers
- Paying down or paying off debt: 47 percent of Gen Xers versus 37 percent of baby boomers
- Retirement savings: 40 percent of Gen Xers versus 33 percent of baby boomers
- Some other financial milestone: 53 percent of Gen Xers versus 36 percent of baby boomers
3 tips to set financial boundaries with your kids
If you’re struggling financially because you’re helping your adult children with money, it may be time to review your budget and set boundaries. You don’t have to stop helping your kids completely, but keeping your finances in check will not only teach your child(ren) financial resilience but also protect the growth of your hard-earned savings.
- Re-examine your budget with your family. If you want to financially support your adult child(ren), but aren’t sure what you can afford to give, it may be time to re-examine your family budget. Before you set aside money to help your kids, make sure that you’ve budgeted for your own expenses, discretionary spending and savings to make sure that helping your child doesn’t mean you’re dipping into your emergency savings or retirement fund.
- Think of other ways to help. If you’re on a tight budget but still want to provide financial support, see if you can add your child to a family subscription or cell phone plan. Also, consider teaching your child financial literacy concepts like the difference between fixed and variable expenses, how to budget and how to open different savings accounts — so they can make their own financial decisions in the future.
- Have an open dialogue. It isn’t always easy to talk about money, but it’s important to discuss it sooner rather than later to avoid building resentment. Frame the conversation about future financial assistance with your children early, and make it clear how much money you can give, how long you can give it and how you can help in other ways, other than giving cash.
FAQs
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Most parents stop paying their kids’ bills by the time they’re 23. Only 27 percent of U.S. adults currently receive, or have received, financial assistance from their parents at age 23 or older, according to Bankrate’s Financial Independence Survey.
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If helping your child financially is causing you to sacrifice your own financial well-being, like drawing from your emergency savings or retirement fund, it may be time to slow down how much you give, or stop altogether.
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Start teaching your child about money when they can understand simple math and start receiving an allowance. Teaching them early about budgeting and saving will set them up for success later in life.
Methodology
All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,377 US adults, among whom 837 are parents with adult children aged 18 or older. Fieldwork was undertaken between 15th – 17th April 2024. The survey was carried out online and meets rigorous quality standards. It employed a nonprobability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.
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