In a new survey, two-fifths of millennials say their parents still pick up one or more of their monthly bills.
And the most common parental subsidy is the largest: housing. Twenty-four percent of millennials say Mom or Dad pay their rent, and 17 percent say parents cover a mortgage.
Smaller shares of the 26-to-41 demographic reported parental help with groceries (22 percent), utility bills (19 percent), auto insurance (18 percent), car payments (16 percent) or streaming services (12 percent).
“It’s just really expensive to be a young person now,” said Kimberly Palmer, a personal finance expert at NerdWallet. “The cost of housing, of food: across the board, everything is expensive, especially in big cities. It can be a huge asset to be able to turn to your parents.”
The findings come from a survey of 2,000 Americans conducted by market researcher OnePoll for Chartway Federal Credit Union in Virginia.
For young adults, the 2020s have posed one economic challenge after another: Spiraling inflation. Rising rents. Lagging wages. Soaring home prices.
Amid those challenges, young Americans have blurred the line between childhood and adulthood. Young adults are staying in school longer and graduating with ever-larger loads of student-loan debt. They’re postponing marriage and a first home purchase as they labor to dig themselves out.
In 2022, 19 percent of men and 12 percent of women in the 25-34 age group cohabited with their parents. The COVID-19 pandemic drove adult children from cramped apartments and crowded downtowns into the more spacious confines of childhood homes.
“There’s a new timeline for the transition to adulthood,” said Christine Percheski, a sociologist at Northwestern University. “And that’s partly because of the increased timeline for schooling that people need to get a good job. And parents see this, and they are trying to support their children as they’re getting more education and getting their lives together.”
The new survey joins a growing data file on the evolving financial relationship between adult children and their parents.
A December survey by Credit Karma, the personal finance company, found that 31 percent of parents support adult children financially, either by allowing them to live in the parental home or by paying some or all of their bills. A significant share of parents said they still pay their adult children a monthly allowance.
Another survey, by the consumer website Savings.com, found that fully half of parents with adult children provide them at least some financial support. Of that group, the average parent reported spending $1,000 a month on adult children, covering everything from rent to food to tuition to travel.
Most of today’s young adults seem to accept parental support not out of desperation, but simply because it is available, and because they believe the parents can afford it.
When the OnePoll survey asked millennials why parents covered some of their expenses, the largest group, 30 percent, chose the response, “They haven’t told me to pay them myself.” Another 26 percent said it was “cheaper” to stay on their parent’s tab. A smaller group said, “Because they are financially comfortable.” Only 12 percent said they could not afford to pay the bills themselves.
Streaming services may not be fond of allowing adult children to share a subscription with their parents. But the broader notion of leaning on one’s parents for financial support seems to have widespread acceptance in 2020s society.
“Because it’s so common, it’s nothing to be embarrassed about, and it’s nothing that you should feel like you need to hide,” Palmer said.
Even so, most millennials seem to desire financial independence. A large majority told the OnePoll survey they plan to be covering all of their own bills within a year or two.
For most parents, supporting an adult child is the very essence of parenting. But parental largesse can be costly. One NerdWallet analysis estimates that parents who choose to cover a child’s expenses into adulthood sacrifice as much as $227,000 in lost retirement savings.
Clearly, the potential cost of supporting a child into perpetuity has some parents spooked. “Footing the Bill for Adult Children?” one recent AARP article asks. “How to Stop – for Your Good and Theirs.”
A Pew Research study found that a majority of American adults believe parents do too much for their adult children. Pew also found that two-thirds of American adults think children should be financially independent by 22. Yet, only one-quarter of adults actually achieve independence by that age.
In the recent Credit Karma survey, two-thirds of the parents who support their children said the effort causes them financial stress. Many aging parents face debt and inflationary pressures of their own.
Financial planners say parents should budget their own expenses before they offer support to an adult child.
“The parents should be taking care of themselves first,” said James Lee, president of the Financial Planning Association, a trade group.
“What I would recommend is that the parents make sure they’re taking care of their own finances, and are saving for their own retirement, so that they won’t run out of money in their own lifetime,” Lee added.
If the numbers don’t add up, experts say, it may be time for parent and child to have a difficult conversation.
“Set an expiration date,” or a deadline for the adult child to take over the bills, said Courtney Alev, consumer financial advocate at Credit Karma. “Set that date, and then be willing to engage with your child.”
The typical young adult “wants to be financially independent and have a path forward,” Alev said. “It’s just been so hard, especially for this demographic.”