Growing Trend: Nearly 60% of Parents Struggle to Cut “Purse Strings” With Adult Children
By Charlotte Young
Back in the day, financial assistance from parents would stop around age 18 for non-students, or immediately following college graduation. But now, who knows? Forbes reports that a recent online survey conducted by ForbesWoman and the National Endowment for Financial Education (NEFE) reveals that 59 percent of parents still provide support to their adult children who are no longer in school from ages 18-39.
Of course, the current economic climate does account for part of the financial dependency. Young adults have experienced “one of the worst recessions since the depression,” and amassing thousands of dollars in college debt hasn’t made things any easier. Not wanting to see their children struggle, the majority of parental assistance extends to housing, living expenses and transportation costs. Concerned parents are also offering assistance for insurance coverage, spending money and medical bills.
Dr. Vivian Diller, a New York-based psychologist, notes that it’s not just the economy that’s causing parents to assist children. She says the family structure has become more “child-centered” in the last 20 to 30 years with parents supporting their children’s lifestyles.
In some cases, this shift has been a blessing: 75 percent of children living at home do help out with family expenses such as groceries and utilities. But it can also be a crippling disadvantage for young adults who don’t learn how to manage money or grasp independence. For some parents, it’s been a devastating sacrifice since they lose privacy, face delayed retirements and take on more debt.
Suzanna de Baca , vice-president of wealth strategies at Ameriprise Financial, warns that once financial security is in danger, parents won’t be able to help themselves or their children. The best thing for parents to do is to set clear boundaries and expectations. Once guidelines are in place, parents can check in regularly with their children to make sure they stay on track. Not only must young adults keep their future in focus, but parents must do so too.