New Survey Finds That Almost Half Of All Parents With Adult Kids Help Them With Money

Written by B. Carlisle on March 30, 2023 updated December 4, 2024

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Life, as we know it, has a remarkable talent for emptying our pockets.

If your finances aren’t well prepared to weather life’s many storms, this can cause scrambling to fund life’s endless parade of expenses, from that sputtering car engine to the unforeseen emergency root canal (thanks, caramel apple).

In these moments of fiscal desperation, individuals often find solace in the ever-reliable – albeit slightly embarrassing – Bank of Mom and Dad. This tried-and-true institution, with its unparalleled customer service and flexible repayment plans, occasionally offers a lifeline to those drowning in the sea of misguided adulthood. This often comes with swallowing one’s pride, along with a well-deserved lecture about “budgeting” and “responsibility.”

If you’ve ever been there – either as a branch manager (parent) offering funds a safety net or account holder (kid) – you’re certainly not alone.

Savings.com recently talked to about 1,000 Americans with at least one grown child to learn more about how parents lend financial assistance to adult-aged children. It’s a follow-up to a 2022 study on the same topic, which found that 1 in 2 parents financially support an adult child.

This year’s study found similar numbers, along with key takeaways about how these expenses correlate with the parents’ retirement.

How many parents are helping adult-age children with financial assistance?

According to Saving.com, almost half (45%) of parents with adult children offer financial assistance to at least one of their grown-up offspring. Parents with adult children with disabilities were excluded from the study.

The survey found that 52% of adult children who receive help from their parents are between 20 and 24 years old (college and immediate post-grad years for many), while only 11% of those over 35 are.

When you break it down generationally among the children receiving support, 66% of those receiving support are Gen Zers (age 11 – 26) and 31% are millennials (age 27 – 42).

For those parents providing financial aid, the average monthly expenditure is over $1,400, with the main expenses being groceries, rent or mortgage payments, and cell phone bills. The survey found that over 75% of parents who financially support their adult children assist with grocery expenses, while 63% pay for their child’s cell phone bills. Additionally, 56% of these parents contribute money towards their grown offspring’s rent or mortgage payments.

The study also revealed that 50% of parents with Gen-Z adult children financed their kids’ vacations, and 41% of all parents providing financial support contributed to their children’s car expenses.

What about student loans?

Student loans were also covered by the Saving.com survey. An estimated 600,000 parents take on their kids’ student loans every year, resulting in a $30,000 debt burden. When it comes to student loan debts, Saving.com found that 21% of these supportive parents contribute an average of $245 per month to ease the burden on their kids.

Today’s generosity comes with a price towards saving for the future: By ceasing to contribute towards their children’s student loan repayments, these parents could potentially allocate an additional $3,000 per year to their retirement savings, according to the survey’s estimates.

Interestingly, parents within a decade of their retirement are the most generous, providing roughly $2,100 monthly to their adult children. However, they only allocate an average of $643 per month to their own retirement savings. So clearly there’s a correlation among respondents: Help the kids out first, pad your retirement savings second.

Saving.com theorizes this is because parents closer to retirement age know they’ve saved properly, allowing them to spend more on their kids.

Nevertheless, the Saving.com found that parents who are currently providing financial assistance to their adult children tend to express greater concerns about their ability to maintain a comfortable lifestyle during retirement.

How is inflation impacting how parents provide help to their adult children?

These days, thanks to sky-high housing prices, many adult age children either do not leave the nest or return to it. A 2020 study found that more than 52% of Americans aged 18-29 were living with their parents – the highest percentage ever recorded.

One conclusion to draw from the Saving.com survey is that inflation has significantly impacted the way parents provide financial assistance to their adult children, resulting in some unique adaptations. For example, the inflated housing market may cause some adult children to reconsider their living arrangements, trading in their dreams of spacious urban lofts for more modest apartments or townhouses in the suburbs.

In response to these changes, parents have had to adjust their financial support strategies while continuing to encourage their children as they navigate the challenges of an increasingly expensive world.