Still supporting your adult children? Join the club
Posted On January 10, 2019
Have you helped your adult children with a rent payment since they moved out on their own? Covered their insurance? Helped them pay down their bills or chipped in on a down-payment for a house or car?
You’re far from alone. You’re actually in the majority.
Nearly 80 percent of parents continue to help their adult children out financially, according to a recent study conducted by Merrill Lynch and shared by CBS News. Ranging from major expenses like weddings and college tuition to everyday expenses like utilities and groceries, parents shell out about $500 billion a year to help their adult children, the study found – roughly twice what they are putting away for retirement.
Sixty-three percent of the parents surveyed by Merrill Lynch said they had sacrificed their own financial security to help their adult children.
Is this just a millennial thing? Hardly. But it is worth noting that according to U.S. Census Bureau figures cited by CBS News, the number of 18- to 34-year-olds living with their parents has risen 8 percent in the decade between 2005 and 2015 – up to just over 34 percent.
What to do? You don’t want your son or daughter to miss rent, get evicted and be forced to move back in with you. But you also don’t want to eat up all your retirement savings.
It’s important to start early. Teaching your children financial responsibility while they’re young will help them cope with paying bills, managing debt and living within their means when they’re older. Open a bank account for your teenagers and encourage them to take summer jobs. Make them pay for their own gas, movie tickets and eating out.
If their money runs out before the next paycheck comes, that’s a lesson better learned at 16 than 26.
If it’s too late and you’re already supplementing your adult children’s income, do what you can to ween them off your support. Leaning on Mom and Dad is never going to help them learn how to get ahead. And if you keep pouring your money into their expenses instead of your own retirement, it’ll likely be you who is reliant on them in the future.