As the cost of living skyrockets, many adults are turning to a family safety net: mom and dad.
Nearly a third of millennials and Gen Zers, age 18 and older, get financial support from your parents, according to a new survey by personal finance site Credit Karma. The site surveyed more than 1,000 adults in October.
More than half of the parents with adult children said that their children live with them. Another 48% said they pay for their children’s cell phone plan, car payments or other monthly bills. Nearly a quarter also said they provide their adult children with a regular allowance, pay part or all of their rent, or have them as authorized users on their credit card, according to the report.
“What used to be paying your child’s cell phone bill every few months has now become a much larger set of expenses for many parents,” said Courtney Alev, Credit Karma consumer financial advocate.
During the pandemic, the number of adults who have moved back with their parents, often referred to as “boomerang kids,” temporarily enriched to an all-time high.
Most said they initially moved with their parents out of necessity or to save money. Strong student loan bills from college and flying housing expenses they have imposed a financial dominance on those just starting out. increasing cost of living Y sky-high rents they’re making it harder to move on.
The number of households with two or more generations of adults has quadrupled in the last five decades, according to another report from the Pew Research Center based on census data from 1971 to 2021. Such households now make up 18% of the US population, he estimates.
Now, 25% of young adults live in a multigenerational household, up from just 9% five decades ago.
In most cases, people between the ages of 25 and 34 live in the home of one or both parents. A smaller part lives in their own house and has a parent or other older relative who stays with them.
Not surprisingly, older parents are also more likely to pay most of the costs when two or more generations share a home. The typical 25- to 34-year-old person in a multigenerational household contributes 22% of the total household income, Pew found.
For parents, however, supporting adult children can be a substantial burden at a time when their own financial security is at risk.
In an economy that has produced the highest rate of inflation since the early 1980s, the cost of providing support has risen sharply. According to Credit Karma, 69% of parents who help their adult children said it causes them financial stress.
“It is essential that parents do what they can to take care of themselves financially first, before offering financial support to their adult children,” Alev said.
“As with anything, budget for your income and expenses, taking into account savings, debt payments and, if possible, contributions to a retirement fund,” he advised.
“Once you’ve done that work, see how much you have left to feasibly help your adult children and set that expectation with them. You might even consider setting a due date to give your adult children a timeline of when they need to be back.” stand up.”