Three-fifths of parents with adult children provided them with financial help in the past year, Pew Research reports in a new study.
The result makes clear—in case we needed a reminder—that modern parenthood doesn't end when a child turns 18. But supporting an adult child can be costly, financial planners say. And parents need to make sure their own financial needs are met.
About half of those under 30 live with their parents, previous Pew research has shown. This number has increased dramatically over the years.
Americans are marrying later and waiting longer to have children. Researchers say these trends indicate a new phase of life that lies between adolescence and full adulthood. Some call it “emerging adulthood.”
“Snowplow” parents pave the financial path for adult children
Young adults face countless economic challenges in America in 2024. College costs and student debt burdens are rising. Real estate prices have skyrocketed. Soaring inflation and interest rates have angered consumers.
Parents, for their part, seem increasingly inclined to continue child-rearing well beyond the age at which their child leaves childhood, removing any obstacles that stand in their way. Some researchers call it “snowplow” parenting.
“Let’s get everything out of the way so our kids can walk down the street with ease,” said Jonathan Abramowitz, a psychology professor at the University of North Carolina.
It's easier than ever to pay an adult child's bills, whether the child lives with you or not. Previous generations mostly paid their bills by mail. Now everything is available via apps or online.
Pew reports that 28% of adults ages 18 to 34 received financial help with household expenses such as groceries or utilities in the past year; 25% had help from their parents with a cell phone bill or streaming subscriptions; 17% for rent or mortgage; 15% for medical expenses; and 11% in education spending.
Less than half of adult children say they are financially independent
According to Pew, fewer than half of young adults say they are completely financially independent from their parents. Even over 30, a third of adult children rely on their parents to pay at least some of the bills.
The story goes on
The Pew study, released Jan. 25, is based on a survey of 4,512 adult children and parents.
Parental help for aging children is often relatively trivial.
John Maxwell, a lawyer in St. Louis, is the father of three daughters in their 30s.
When they finished school, he basically told them, “You're on your own, kid.” They got jobs, moved out, and learned to support themselves.
But not completely. The Maxwell parents still pay for a family cell phone plan and some streaming services. Every year, parents cover the flight or hotel bills for a family vacation.
The father loaned his eldest daughter money when she was just starting her career. “But it was a loan, not a gift,” he said.
And this is where the Maxwells draw the line.
“It’s a tough world out there,” John Maxwell said. “You have to learn to stand on your own two feet.”
For aging parents, supporting adult children is “Parenting 101”
For many aging parents, supporting an adult child seems to be the essence of parenting.
“We would go to the ends of the earth to make sure our children were safe and happy,” said Christopher Lyman, a certified financial planner in Newtown, Pennsylvania, who advises couples with adult children.
According to the National College Attainment Network, in 2022, four in 10 high school students did not complete the Free Application for Federal Student Aid (FAFSA), leaving nearly $3.6 billion in Pell Grants unused.
Parents who support adult children see their offspring immersed in a different world than the one they knew as young adults, said Teresa Bailey, a certified financial planner in Nashville.
“They feel like the economy is different now, the world is different and it's harder for someone to be completely financially independent,” she said.
Parental allowance is fine, she said, as long as the parents can afford it. Some aging parents continue to support adult children at the risk of retirement themselves.
“That’s the first thing we’re checking,” she said. “Are you spending on your children and putting yourself in a situation where they have to spend on you because you haven’t saved enough for retirement?”
Bailey projects a couple's budget up to age 90 and shows them where their finances are likely to be based on their saving and spending habits.
For couples who spend a lot of money on their adult children, the exercise can be “an eye-opener,” she said.
Many parents who help adult children put their own finances at risk
In the new Pew study, more than a third of parents who provided financial assistance to adult children said it hurt their own finances.
“Oftentimes, those providing the support are not the ones who can afford to provide the support,” Lyman said.
For adult children who are the recipients of their parents' generosity, help can be a blessing or a curse.
In certain circumstances, parental assistance can be a godsend: a recent college graduate struggling with student loans or a first-time home buyer who can't quite afford the down payment.
But at some point the help must come to an end, experts say.
“It has a downside,” Abramowitz said, “and that is it can increase the need for dependency. Young adults get stuck because parents protect them, and the children never learn how to start.”
Parents who support adult children “have the best intentions at heart,” Abramowitz said.
Still, they should ask themselves the question every now and then, he said: “When does it stop the child from moving on with his life?”
This article originally appeared on USA TODAY: Parents use retirement savings to help adult children financially
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