As parents, we want nothing but the best for our children. From their happiness to their health and even their financial well-being, we strive to provide them with abundance. But what happens when supporting our adult children starts to impact our own livelihoods?
The soaring cost of living, rising inflation, student debt burdens, and an uncertain job market have made it increasingly challenging for parents, especially those of Gen Z, to support their children without sacrificing their own financial milestones. A recent survey by Bankrate revealed that 68% of parents have either supported or are currently supporting their adult children, resulting in delays in their own financial goals, retirement plans, debt repayments, and even withdrawals from emergency savings.
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However, younger millennials and Gen Z have a different perspective. According to their viewpoint, they shouldn’t be responsible for paying bills until they reach the age of 22. Millennials believe they should start contributing to expenses such as cell phone bills and subscription services at 20, take on car payments by 21, and begin covering rent by 22. Gen Z, on the other hand, prefers even later independence, with rent payments starting at 23 and taking on travel costs by 21.
This discrepancy in expectations can lead to financial strain for parents, as demonstrated by Mark Lacy’s experience. Supporting his two sons since their high school graduation has resulted in a $400,000 dent in his retirement funds, Lacy recently told Fortune magazine. Like many other parents, Lacy regrets the decision to provide excessive support and believes that such actions hinder their children’s ability to take on adult responsibilities and contribute to society.
Research conducted by Age Wave and the Harris Poll of over 7,000 retirees reveals that 59% of pre-retirees desire better boundaries with regard to financial support for family members or close friends. Additionally, 63% of retirees expressed their intention to limit financial assistance to adult children or relatives, while 55% wanted to restrict bequests to heirs.
The pressure to match the financial support provided by peers and friends can influence parents’ decisions to continue providing for their adult children. However, it’s crucial for parents to set their own boundaries and make choices based on their financial capabilities. Difficult conversations need to take place, both with spouses and children, to establish clear expectations and financial responsibilities.
To strike a balance between supporting adult children and maintaining financial stability, JPMorgan Private Bank’s head of behavioral science, Jeff Kreisler, suggests starting with open and honest conversations. Ground these discussions in shared values, intentions, and goals, rather than fixating on numbers. Understanding each other’s needs and concerns will help foster a productive dialogue that addresses everyone’s financial well-being.
It’s important to remember that supporting adult children should be coupled with opportunities for growth, learning, and responsibility. Financial assistance should empower children to take charge of their own lives and make informed financial decisions.
As parents, we must find a balance between supporting our adult children and securing our own financial future. It’s a journey that requires open communication, setting boundaries, and teaching financial independence. Wellthi is here to guide you through these challenges, providing the tools and support you need to navigate the complexities of parenthood while maintaining your financial well-being. Together, we can create a future where both you and your children thrive.