How American parents help adult children: the conventional wisdom about financial independence in the United States is too exaggerated

There is a common perception among immigrants that American parents quickly push their children out of the family nest and do not help them financially. But that's not true. The rising cost of living continues to put financial pressure on young Americans, forcing many to turn to their parents for help. But despite the willingness of parents to help their adult children in difficult times, many of them are risking their own financial future, the publication writes. Bankrate.

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About three in five (61%) parents or guardians of children aged 18 and older now give or have sacrificed their personal money to help their adult children.

69% of Gen X parents (44-59 years old) said they supported their children through their own retirement savings or a financial cushion set aside for a rainy day. By comparison, only 56% of baby boomer parents (ages 60-78) did the same.

American parents help their children by paying their daily bills, providing large sums for large purchases, or allowing them to live in their parents' home and not pay their share of the rent. In an environment of high housing costs, 49% of adults aged 23 and older who receive or have received ongoing financial assistance from their parents are dealing with their housing problem at their expense.

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The decision to continue paying children's bills can be difficult for parents not only emotionally, but also financially. They must be clear about whether they can afford it.

“Housing costs and everyday expenses are the most common areas in which American adults receive or have received financial assistance from their parents. Persistent inflation and housing affordability issues make it unlikely that this situation will change anytime soon,” explained Greg McBride, chief financial analyst at Bankrate.

Bankrate survey findings:

• Parents continue to support adult children. 27% of adults aged 23 and over said they receive or have received ongoing financial assistance from their parents.
• Adult children most often receive housing assistance. 49% of adults age 23 and older who received financial assistance from a parent or guardian receive assistance with housing costs. For 37% of young people, their parents helped with rent or provided them with the opportunity to live with them by paying a small portion of the rent or not paying rent at all. 17% of adult children received help from their parents to purchase their first home.
• 61% of parents sacrifice or have sacrificed their finances to help their adult children, including 69% of Gen X parents and 56% of Baby Boomers.

Today's younger generation receives more family support than their parents' generation

By age 23, many young adults graduate from college or start working, but this does not always mean they stop relying on their parents. About one in four adults (27%) aged 23 and older currently receive or have received ongoing financial assistance from their parents.

Today's young Americans are significantly more likely to rely on older generations for financial support than their parents once were: 42% of Gen Z (ages 23-27) and 42% of Millennials (ages 28-43) receive or have received ongoing financial support from their parents. At the same time, among representatives of generation X and baby boomers there were 22% and 10%, respectively.

Additionally, men 23 and older are more likely than women to receive or have received ongoing financial assistance from their parents (30% and 25%, respectively).

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In addition to providing housing or helping with the purchase of a home, parents help adult children in other ways. Thus, 48% of young people surveyed say that they receive or have received help with everyday expenses (paying for groceries and utilities). People are receiving or have received financial assistance that is not intended for a specific purpose (33%) or help paying off debts (21%).

Many parents want to help their children, and this sometimes puts a dent in their own finances. About three in five (61%) parents make significant sacrifices for their adult children. Most often, to help their children, they take money from the emergency “financial cushion” (43%) or postpone repayment of their own loans (41%).

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