A new survey finds 59 percent of parents are providing, or have in the past provided, financial support to their adult children when they are no longer in school. The online poll was commissioned by the National Endowment for Financial Education (NEFE), in cooperation with Forbes.com, and conducted by Harris Interactive in May 2011.
The survey explores how the current economic and job landscape is presenting a bigger challenge than expected for those who should be leaving the nest. Sixty-five percent of adult children-those ages 18-39 who are not in school-believe the financial pressures faced by their generation are tougher than those experienced by previous generations. And parents seem to agree, with one in three (32 percent) saying their own generation had it easier than their children's generation. Additionally, 43 percent of parents providing financial support say they are doing so because they are legitimately concerned with their child's financial well-being, while 37 percent say they have struggled in the past and do not want to see their children struggle the same way.
Parents are continuing their [financial] involvement longer than we expected, says Ted Beck, president and CEO of the Denver-based NEFE. The general sentiment is that financial pressures are higher for this generation. But if parents are going to financially support their adult children, they should first have a serious talk about their kids' expectations so that everyone protects their financial futures.
According to the survey, parents are providing support in many ways:
50 percent are providing housing
48 percent are helping with living expenses
41 percent are aiding with transportation costs
35 percent are providing insurance coverage
29 percent are handing out spending money
28 percent are helping with medical bills
Among the adult children who are living at home, the survey finds 42 percent are contributing in non-financial ways, such as cooking, cleaning or child care; but 75 percent are financially contributing to the household, with:
52 percent chipping in toward groceries/other food expenses
34 percent helping with utilities
31 percent putting gas in the family car
29 percent helping with the rent or mortgage
But in what Beck notes is a disturbing trend, parents are making sacrifices to help their kids out-sacrifices they may not be able to comfortably make. We all want to ensure the best for our children. But if you are taking on extra debt or delaying retirement to help your adult child, you could be making a mistake and putting your own financial future in jeopardy, Beck warns.
Thirty percent of parents responded that they have given up privacy since their adult children moved back home; 26 percent have taken on additional debt; 13 percent have delayed a life event, such as buying a home or taking a vacation; and 7 percent have delayed retirement.
To schedule an interview or for questions regarding the survey, contact Paul Golden at 303-224-3514 or pdg@nefe.org.
For tips on how parents can encourage independence if financially helping their adult children, visit www.smartaboutmoney.org.
Survey Methodology
This survey was conducted online within the U.S. by Harris Interactive on behalf of NEFE from May 10-12, 2011, among 683 adults ages 18-39 who are not students, and 391 parents of children ages 18-39 who are not students. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated.
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