(The Hill) — In a new survey, two-fifths of millennials say their parents still pick up one or more of their monthly bills.
And the most common parental subsidy is the biggest: housing. Twenty-four percent of millennials say mom or dad pays their rent, and 17 percent say their parents cover the mortgage.
A smaller share of the 26-to-41 demographic reported parental help with groceries (22 percent), utility bills (19 percent), auto insurance (18 percent), car payments (16 percent) or streaming services (12 percent).
“It’s really expensive to be a young person right now,” said Kimberly Palmer, personal finance expert at NerdWallet. “Costs of housing, food: in general, everything is expensive, especially in big cities. It can be a big advantage to be able to talk to your parents.”
Findings they come from a survey of 2,000 Americans conducted by market researcher OnePoll for Chartway Federal Credit Union in Virginia.
For young adults, the 2020s presented one economic challenge after another: spiraling inflation. Rent growth. Back wages. Rising house prices.
Amidst these challenges, young Americans have blurred the line between childhood and adulthood. Young adults are staying in school longer and graduating with ever-increasing student loan debt. They are delaying marriage and buying their first home while they try to dig themselves out.
In 2022, 19 percent of men and 12 percent of women in the 25-34 age group lived with parents. The COVID-19 pandemic drove adult children from cramped apartments and overcrowded centers to the more spacious confines of childhood homes.
“There is a new timeline for the transition to adulthood,” said Christine Percheski, a sociologist at Northwestern University. “And that’s partly because of the increased time frame for schooling that people need to get a good job. And parents see that, and try to support their children as they get more education and get closer to life.”
The new survey joins a growing body of data on the development of financial relationships between adult children and their parents.
A December survey by Credit Karma, a personal finance company, found that 31 percent of parents financially support adult children, either by allowing them to live in their parents’ home or by paying some or all of their bills. A significant number of parents said that they still pay their adult children a monthly allowance.
Another survey, conducted by consumer website Savings.com, found that as many as half of parents with adult children provide them least certain financial support. Of that group, the average parent said they spend $1,000 a month on their grown children, covering everything from rent to food to tuition to travel.
Most young adults today seem to accept parental support not out of desperation, but simply because it is available and because they believe their parents can afford it.
When the OnePoll survey asked millennials why parents cover some of their expenses, the largest group, 30 percent, chose the answer: “They didn’t tell me to pay for them myself.” Another 26 percent said it was “cheaper” to stay on their parents’ card. A smaller group said, “Because they are financially comfortable.” Only 12 percent said they could not pay their bills on their own.
Streaming services may not allow adult children to share subscription with his parents. But the broader notion of relying on parents for financial support seems to be widely accepted in 2020s society.
“Because it’s so common, it’s nothing to be ashamed of, and it’s nothing you should feel like you have to hide,” Palmer said.
Even so, most millennials seem to want financial independence. The vast majority told the OnePoll survey that they plan to cover all their bills within a year or two.
For most parents, supporting an adult child is the essence of parenting. But parental generosity can be costly. One NerdWallet analysis estimates that parents who choose to cover their child’s expenses into adulthood sacrifice as much as $227,000 in lost. pension savings.
It’s clear that the potential cost of supporting a child in perpetuity has scared some parents. “Making the law for grown children?” asks a recent AARP article. “How to stop – for your sake and theirs.”
A Pew Research survey found that most American adults trust your parents do too much for their grown children. Pew also found that two-thirds of American adults think children should be financially independent by 22. Yet only one-quarter of adults actually achieve independence by that age.
In a recent Credit Karma survey, two-thirds of parents who support their children said that the effort causes them financial stress. Many elderly parents are dealing with their own debt and inflationary pressures.
Financial planners say parents should plan their own expenses before offering support to an adult child.
“Parents should take care of themselves first,” said James Lee, president of the Financial Planning Association, a trade group.
“What I would recommend is that parents make sure they take care of their own finances and save for their own retirement, so they don’t run out of money during their lifetime,” Lee added.
If the numbers don’t add up, experts say, it may be time for parents and child to have a tough conversation.
“Set an expiration date,” or deadline, for an adult child to take over accounts, said Courtney Alev, consumer finance advocate at Credit Karma. “Set that date, and then be ready to deal with your child.”
The typical young adult “wants to be financially independent and have a path forward,” Alev said. “It was so hard, especially for this demographic.”