- Nearly one-third (32%) of American parents with children over the age of 18, support them financially.
- The most common ways parents financially support their adult children include allowing their children to live at home (64%) and paying some or all of their monthly bills (49%).
- Nearly 60% of parents who financially support their adult children say it causes them mental stress (59%).
There is plenty of debate about when parents should stop providing financial support to their children, and it’s not always easy for them to know when to draw the line. Many parents feel a sense of duty and empathy towards their children as they struggle to find their financial footing. However, doing so can have a negative impact on their own mental and financial wellbeing.
According to a new study conducted by Qualtrics on behalf of Intuit Credit Karma, 32% of parents with children over the age of 18 say they currently provide financial support to their adult children. Of those, 64% say they provide financial support by allowing their kid(s) to live at home and another 49% say they pay some or all of their kids’ monthly bills, including cell phone, utilities, food and car payments. Other parents pay some or all of their kids’ rent and some even provide their kids with regular allowances or checks (23%).
As a result, most parents (76%) who financially support their adult children say doing so impacts their own finances. More than half (52%) have had to cut back on their current living expenses, while 38% say it impedes on their lifestyle. For others, it has resulted in them taking on debt (34%), limiting their retirement savings (29%) or forcing them to prolong their retirement date (27%).
It’s not just their finances that are hurting. Nearly 60% of parents say financially supporting their adult children causes them mental stress (59%), and another 62% say it causes them financial stress. The top stressor for parents caring for their adult children is inflation (51%), followed by a lack of savings (43%) and debt (42%). For others, financially caring for their adult children is making it harder for them to afford necessities, such as bills, groceries and rent (39%) and is contributing to a lack of retirement savings (38%), which could impact their ability to retire in the future.
When asked why they continue to financially support their adult children, half say they do so because it’s their duty as a parent (50%). Others point to today’s high cost of living (42%), an unfriendly job market – 33% of parents who care for their adult children say they do so because their child can’t find enough work – and rising rent prices (23%).
“Achieving financial independence as a young adult can be challenging, especially as they face high housing and education costs,” said Courtney Alev, consumer financial advocate at Credit Karma. “There’s nothing wrong with providing financial support to your adult children if they’re in need, but if it begins to have a negative impact on your own finances, it is probably time to set some guardrails. In addition to clearly communicating any expectations tied to the financial assistance you’re providing, make sure you’re assessing your own financial situation to ensure you’re not negatively impacting your own financial goals, such as pulling from your retirement savings. You can also consider other ways – that may have less impact on your wallet – to help your child achieve their financial goals, such as adding them as an authorized user to your credit card so they can build their credit or allowing them to live at home if they help around the house or pitch in on groceries and utilities.”
Methodology
This survey was conducted online within the United States by Qualtrics on behalf of Intuit Credit Karma from November 20 to November 26, 2023 among 1,249 U.S. adults above the age of 18.