Dear Chuck,
Our adult son, 30, still depends on us financially. We send him about $1,000 a month to make up for the deficit caused by inflation. We are debating whether to help him or empower him.
Supportive parents
Dear supportive parents,
You are one of millions of families in the same predicament. Many Millennials (adults ages 27-42) and Gen Z (adults ages 18-26) are still financially dependent on their parents. Let’s examine the data and trends, then I’ll give you my advice.
Adults who are still supported by their parents
A recent Axios survey conducted in June by The Harris Poll reports that one-third of millennials and over 60% of Gen Z consumers rely on their parents for financial support. 65% admit this is due to overspending on non-essentials. A majority of respondents believe it’s better to treat yourself than hold back; they say they deserve more expensive purchases “after getting through the last few years.” 43% try to keep up with their friends.
According to a recent census published in Knowledge at Wharton, nearly half of 18- to 29-year-olds still live with their parents—the highest number since the Great Depression of 1929-1941. The main reason for this is late marriage and family formation, and insufficient income to cover housing costs.
A Pew Research Center study published in the New York Post shows that more than half of 18- to 34-year-olds rely on their parents for some sort of allowance; only 45% are completely independent. A Harris Poll commissioned by DailyPay shows that only a quarter of Generation Z is able to pay all of their bills on time. Rather than have their parents send them money, many choose to live with them. One in five adults ages 30- to 34-year-olds have parents who help with household bills.
In 2022, Matt Schulz, chief credit analyst at Lending Tree, told the New York Post, “We’re likely to see young adults continue to put off important financial and personal milestones because they simply can’t afford them. They’ll wait longer and longer to get married, have kids, buy a home or start a business…” Some can’t. Others won’t.
According to a survey conducted by Experian and published in Business Insider, more than half of millennials and Generation Z are financially dependent on their parents. 70 percent of millennials feel embarrassed when they ask their parents for financial support. 60 percent of the younger group feel the same.
Set boundaries now
In 2020, Northwestern Mutual published an article for parents helping young adults during the Covid-19 crisis that listed five important things to consider when providing financial support:
- Secure your emergency fund.
- Establish ground rules early on.
- Make your children accountable.
- Correct course if necessary.
- Leave the guilt behind.
Make sure you have an exit
Parents often spend money on groceries, cell phones, housing, transportation, insurance, medical expenses, and student loans. For the benefit of parents and children, some accountability and a deadline can motivate the younger generation to live within their means. I encourage parents and their children to learn to apply biblical financial principles. They are timeless and provide freedom and protection. Crown offers online training, budget counselors, and many other resources. Learning to track expenses and create a budget is essential to figuring out where money is going and achieving financial goals. For help, see How to Create a Budget and The Simple Guide to a Budget You Love.
An alternative to financial assistance is to set up a family loan. You can find more information on this topic at Crown, Bankrate and NerdWallet.
Empowering or enabling?
Every family is different. In other countries, it is common for adult children to live at home while they work and contribute to household expenses. Here in our own country, this can be beneficial for both parents and their children. Open dialogue, appropriate boundaries and mutual respect are necessary to create a comfortable living situation.
It’s important to recognize that some parents provide for their children when others cannot. Unfortunately, some jeopardize their financial future by continuing to pay for things their children should be paying for. Smart parents let their children grow up and take responsibility for their expenses. This gives the young adults a chance to gain some much-needed dignity. Of course, there are exceptions. Even I have stepped in to help on occasion. The point is, there is a time to let go. When it becomes a dependency and an expectation, you’ve reached the point where you allow it. You and your spouse can probably agree on when that point is. Then agree to make a plan to end it peacefully.
Fortunately, many young adults are self-employed and help their parents and grandparents. What we are witnessing in America is a wake-up call for families. Parents must lead by example by managing their own finances wisely. Children watch us work, give, save, spend and invest. The way we live day to day speaks louder than words.
If your young adult children or you yourself are struggling with credit card debt, Christian credit counselors are a valuable and trusted resource. They can help you consolidate your debt to get on the path to financial freedom.
Chuck Bentley is CEO of Crown Financial Ministries, a global Christian ministry founded by the late Larry Burkett. He hosts the daily radio show My MoneyLife, heard on over 1,000 Christian music and talk stations across the U.S., and is the author of his latest book, Economic Evidence for God?. Follow Crown on Facebook.