Nearly half of US parents provide some kind of financial support to their adult children, who are grappling with higher food and living costs than they did, a new study has found.
The study – conducted by Savings.com – found that young, working-class Americans were not substantially benefiting from the recovery of the country’s economy, as “evidenced by high employment, falling inflation, and economic growth”. That has forced many of them to continue to rely on their parents to help cover costs of living.
The average age of adults receiving financial help from their parents – sometimes at the risk of the parents’ retirement security – was 22, according to the study. And while parents surveyed in the study on average said their adult children should become financially independent by 25, many were supporting those children beyond that milestone.
Of parents providing support, 21% were helping millennials (age 28-43) or members of gen X (age 44-59). Millennials and gen X adult children were on average given between $907 and $960 each month by their parents.
Gen Z adults (between 18 and 27) were getting more help from their mothers and fathers, averaging about $1,515 monthly.
Notably, many adults from gen Z still have college and university expenses.
The most common expenses parents covered for adults across those three generations were groceries, food, cellphone bills, rent, mortgages, tuition and health insurance.
With soaring costs of food, housing and other living expenses, more adults are either choosing or being forced to still live in their parents’ home, the survey determined. And the future outlook of the cost to live in the US remains bleak.
All food prices are predicted to increase by nearly 3%, according to the US agriculture department. Supermarket and grocery store purchases are expected to increase by 1.6%.
Affordable housing, meanwhile, remains in short supply. If an adult in the US is even able to buy a home, record high interest rates can deter them from taking out a mortgage.
In October 2023, the average interest rate for a 30-year, fixed-rate mortgage was nearly 8% – a more than 20-year high, according to the Mortgage Bankers Association.
And while interest rates have since fallen, for many, they haven’t fallen enough, especially since houses are also more expensive. The average age of homebuyers last year was 49, and they are only getting older.
A new Harris Poll Thought Leadership and Future Practice survey of US renters from all age groups – gen Z, millennials, gen X, and boomers – reported 61% said they were worried they would never be able to own a home, with some saying the areas in which they live had become so unaffordable that they were “barely livable”.
Younger generations also carry more student loan debt than ever and make lower wages, when adjusted for inflation.
But supporting their adult children could compromise parents’ ability to save for their own future.
Working parents were found to contribute “2.4 times more to support adult children than they do to their retirement accounts each month”, according to the Savings.com study.
The average amount a parent gives to their adult child each month is $1,384 – more than twice what the average working parent contributed to their own retirement savings monthly, which on average was $609.
The study also said 61% of adults living at their parents’ homes don’t pay rent or contribute to any household expenses.
The study concluded that “there is a clear challenge in the economy today”.
“Driven by a convoluted mix of socioeconomic factors, adults receive help from their parents well into their twenties, thirties, and beyond,” the study said.
“For some, it’s tempting to simply say that today’s young adults are just mooches and that a strong foot in the rear will launch them into normal, independent adulthood. That may be gratifying for parents who are tired of footing the bill, but it doesn’t solve or even properly describe the economic factors at play, such as rising housing costs.”
