Half of parents still support adult children financially, study shows

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Throughout the pandemic, many adults turned to a likely safety net: their parents.

From buying food to paying for their cell phone plan or covering health and car insurance, half of parents with a child over 18 give them at least some financial support, according to a report from Savings.com.

These parents spend an average of about $ 1,000 a month on such expenses, the report found.

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Young adults who have just started have faced significant financial obstacles over the last few years, including an uneven labor market, large student loan bills from school and soaring housing costs.

By 2020, the proportion of those living with their parents (often referred to as “boomerang children”) temporarily rose to a historic high.

And yet, 62% of adult children living at home do not contribute to household expenses at all, Savings.com found.

Now inflation poses new challenges to achieving economic independence.

For parents, however, support for adult children can be a significant drain at a time when their own financial security is at stake.

“Even with the added responsibility of caring for grown children, parents also need to take care of themselves,” said Shelly-Ann Eweka, senior director of financial planning strategy at TIAA.

“It’s like when you’re on a plane and the flight crews say that if you have to wear masks because of an emergency, you have to put yours on first before helping others.”

When you spend money supporting your adult children, it drains the funds you could have set for other financial goals, such as paying off debt, saving up for long-term health care, and retirement planning, Eweka said.

As a general rule, you should first set aside money for your pension and emergency fund, she added.

“It’s important to prioritize where your money is going.”

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