Many parents anticipate providing financial support for their children until they reach adulthood. However, a significant number acknowledge that they continue to financially assist their adult children, sometimes well into their late 20s and early 30s, as revealed in a recent study by the Pew Research Center.
Despite the fact that today’s young adults are more likely to hold college degrees and earn higher incomes when adjusted for inflation compared to their parents three decades ago, the financial support continues. The Pew report highlights that young adults are achieving milestones such as marriage and parenthood later in life, while surpassing their parents’ generation in educational achievements, employment rates, and wages.
Concurrently, adult children are more burdened with student loan debt, with higher amounts compared to their parents at a similar age. When prices were taken into account, the average amount of student debt held by young people in 1992 was between $6, 000 and $7, 000. Fast forward to 2022, and adults aged 25 to 29 owed a median of \(16,000, while those aged 30 to 34 owed \)20,000.
The Pew report draws from two surveys conducted in the previous fall. One survey targeted a nationally representative sample of parents in the U.S. with adult children aged 18 to 34, while the other focused on a similar sample of adults within that age range who have at least one living parent.
Financial assistance takes various forms, including providing discounted or free food and shelter. Pew’s findings indicate that approximately one-third of young adults between 18 and 34 still reside with a parent. Among them, 57% in the 18-to-24 age group, 21% in the 25-to-29 age group, and 11% in the 30-to-34 age group are living with their parents.
Of those young adults who haven’t left their parental home, nearly three-quarters contribute financially to the household in some way. They assist in covering expenses like groceries, utility bills, and rent or mortgage payments. Notably, there was no specific mention of the exact amount they contribute.
Regarding racial and ethnic differences in living arrangements, Pew researchers noted that there were no statistically significant variances among those aged 18 to 24. However, for individuals aged 25 and older, Hispanic and Black young adults are more inclined to live with their parents compared to White and Asian counterparts.
Despite the financial implications, most young adults living at home view the arrangement positively, citing benefits to their personal financial situation. Moreover, a considerable number of parents express contentment with the living situation, with many stating a positive impact on their relationship with their child.
Financial assistance flows both ways, with 59% of parents providing support to adult children in the past year, and 44% of young adults receiving such help. The assistance commonly covers household expenses, cellphone bills, streaming services, rent, medical costs, and education.
While providing financial aid to adult children may strengthen the parent-child relationship, the impact on parental finances varies. Among parents with adult children at home, the survey results show mixed perceptions of the financial impact, with some indicating negative effects, especially among those with lower incomes.
Interestingly, a portion of young adults also extend financial support to their parents, with reasons ranging from special circumstances to recurring expenses. This reciprocal financial assistance is more prevalent among young adults with lower incomes and parents facing financial constraints.
In summary, the evolving dynamics of financial support between parents and adult children underscore the changing landscape of intergenerational relationships and economic dependencies.