“These stats are a little scary and I have to admit, I’m a little guilty,” said family finance expert Greg Murset in a recent interview with WWJ’s Beth Fisher. He was talking about recent research that indicates more than half of parents with adult children in the U.S. provide them with regular financial assistance.
According to a survey of 1,001 U.S. parents conducted by savings.com, 83% of supporting parents contribute to their adult kids’ monthly groceries, 65% help with cell phones, and nearly half (46%) pay for vacations. Overall, the average support per adult child was $1,474 monthly, a 6% increase compared to last year.
Savings.com noted that high inflation has coincided with a new peak in parental financial support. It also said that Gen Z (18 to 28-year-olds) receives more financial support than other generations, including millennials (29 to 44-year-olds).
“While the average contribution to millennials decreased slightly, a significant increase in support for Generation Zers pushed the overall average higher,” the report said. “Members of Generation X (ages 45-60) rarely receive financial assistance from their parents, likely because they've either achieved financial independence or have inherited family wealth.”
Research released by Bank of America in March found that “spending growth on necessary and discretionary items among Gen Z has been faster than the overall population,” and that “Gen Z spending was nearly twice as much as they had in savings, possibly as the high cost of living exerts financial pressure.”
“While increased wage growth helps ease some of this pressure, Bank of America data also suggests Gen Z is facing an increasingly difficult labor market,” said the bank. “The number of Gen Z households receiving unemployment grew nearly 32% year-over-year in February and unemployment among new entrants to the labor market is on the rise.”
Audacy’s “Something Offbeat” podcast also recently interviewed Aleksandra Medina of the Gen Z-focused finance app Frich about the generation’s spending habits. In particular, the show focused on the eye-popping $4,000 that they tend to spend on breakups.
“I do help a little bit and I think it’s something that a lot of us are grappling with,” said Murset of helping support his adult children.
“I think there’s hope if we start a little earlier in the game, but yeah, this is something that’s real. Helping kids, especially with all this inflation and everything costing a lot – it’s tough out there. This is affecting a lot of families.”
He said that his experience aligns with the savings.com findings, since he provides help with groceries, cell phone bills and rent for his six children aged 18 to 27.
“So, some of them, I don't help, because they’re flying on their own totally. And some of the them that are a little younger, I’m still helping, you know,” he told Fisher. “They’re freeloading on the cell phone plan and I maybe kick in a little bit for groceries as they’re away to school or something. But it’s something that’s real.”
However, parents don’t have to feel totally gloomy about helping their children out. For example, Murset recommends that parents helping out their adult children create a plan that provides their kids with experience paying bills. He suggested that children work on paying their college tuition while their parents help them pay rent, or making a chore list for adult children who live at home.
“I mean, I love it,” Murset said of implementing that system with his own son, who now responsible for maintaining the lawn. “It helps me a lot, and it helps him a lot because he doesn’t have to pay a bunch of rent.”
As for parents of younger children who don’t want them lingering at home after high school graduation, Murset said it is important to teach them a balanced financial approach. He said people who are financially stable usually have a few things in common: hard work ethic along with balanced savings, donations and some spending.
According to Bank of America’s research, parents also have a reason to look forward to the coming years. It said Gen Z is expected to be the largest cohort of the global population over the next 10 years at around 30% and that “their income is also expected to surge.”
“In roughly the next five years, Gen Z will have globally amassed $36 trillion in income and that figure is expected to surge to $74 trillion by around 2040 Consider that in 2023 it was just $9 trillion,” Bank of America said.