Half of U.S. parents are still financially supporting their grown-up Gen Z and millennial children, according to a survey by Savings.com, even as doing so is chipping away at their life savings. That’s up from 47 percent of parents last year and 45 percent in 2023.
But while some are feeling pressured to help out their struggling children, a growing number are pulling away from this often-unbearable responsibility.
Almost 40 percent of them are planning to cut off funds within the next two years, the survey found, leaving Gen Zers and millennials to fend for themselves in a somewhat hostile economy.
Why It Matters
Relying on the “bank of mom and dad” has become common for millennials and Gen Zers, who are facing higher inflation and skyrocketing housing costs at a time when many would be building up their careers and forming their own families.
A series of recessions and economic crises—including the Great Recession of 2008 and the COVID-19 pandemic—in these generations’ formative years have made it harder for them to accumulate the amount of wealth necessary for crucial life milestones.
Their parents—especially Baby Boomers—have generally accumulated much more wealth and are usually sitting on massive home equity, which makes them willing to help their struggling children. But the higher cost of living, fears of rising inflation, uncertainty around the U.S. economy and the future of Social Security are affecting them too—and helping their children is often stretching them thin.
What to Know
Savings.com, a website that provides money saving tips and financial comparisons, surveyed 1,000 U.S. parents of adult children in February 2024.
It found not only that 50 percent of them are still financially supporting their grown-up offspring, but they are also giving them more money than they used to: the average amount these parents are giving is $1,474 a month, about 6 percent more than last year and a three-year high.
As could be expected, Gen Zers—who are currently aged between 18 and 28—are receiving more money than millennials—aged between 29 and 44—, who have had more time to build up careers and increase their wages and savings.
Parents of Gen Zers are giving them an average $1,813 per month, while parents of millennials are giving them $863 per month.
What Are Parents Paying for?
This money goes to support younger generations in all aspects of their life, from putting food on the table to going on vacation.
Some 83 percent are contributing to their adult kids’ monthly groceries, the survey found, for an average of $220 a month; 65 percent are helping with cell phones for an average of $63 a month, and 46 percent with vacations for an average of $190 a month.
Some 54 percent of parents are helping their adult children by covering the cost of health insurance and health care for an average of $165 a month, while 63 percent are helping them pay their rent or mortgage for an average of $653 a month.
Help often comes with strings attached.
A majority of 77 percent attach conditions to their financial support, while 23 percent give money without any conditions.
Most parents (48 percent) who attached conditions to their financial support require their adult children to hold on to a job or actively seek employment, while 45 percent want them to pursue education and 26 percent to contribute to household expenses if living in the same home.
Can They Afford It?
Continuing to support their grown-up children comes at the cost of sacrificing their own financial security for nearly 50 percent of U.S. parents.
Working parents who support their adult children are giving them double the amount ($1,589) they put into their retirement funds ($673).
Most are doing it anyway because they feel like they have to: 40 percent said they felt pressured to give financial support to their adult children even if it meant stretching their own financial resources beyond comfort.
Getty Images
But while 35 percent of parents feel responsible to support their adult children financially, 50 percent do not. Eleven percent of parents helping their adult children plan on stopping in less than a year; 26 percent in one to two years; 28 percent in three to four years; and 16 percent in five or more years.
Another 18 percent plans on helping their adult children indefinitely, or for as long as they may need to.
Savings.com researchers are concerned about what helping their adult children could mean for U.S. parents should economic conditions worsen this year.
What Will Gen Zers and Millennials Do Without the Bank of Mom and Dad?
If the bank of mom and dad doesn’t dry out completely in the next two decades or so, Gen Zers and millennials stand to inherit a lot of money in the so-called “great wealth transfer.”
Economists expect the greatest intergenerational wealth transfer to take place in the U.S. within the next 20 years, as around $84 trillion in assets change hands from Baby Boomers to their Gen Z and millennial children and grandchildren.
Bank of America expects Gen Zers to become the largest and richest generation by 2035, a drastic change from their current situation, while by 2040 they will have accumulated $74 trillion in income.
Half of U.S. parents are still financially supporting their grown-up Gen Z and millennial children, according to a survey by Savings.com, even as doing so is chipping away at their life savings. That’s up from 47 percent of parents last year and 45 percent in 2023.
But while some are feeling pressured to help out their struggling children, a growing number are pulling away from this often-unbearable responsibility.
Almost 40 percent of them are planning to cut off funds within the next two years, the survey found, leaving Gen Zers and millennials to fend for themselves in a somewhat hostile economy.
Why It Matters
Relying on the “bank of mom and dad” has become common for millennials and Gen Zers, who are facing higher inflation and skyrocketing housing costs at a time when many would be building up their careers and forming their own families.
A series of recessions and economic crises—including the Great Recession of 2008 and the COVID-19 pandemic—in these generations’ formative years have made it harder for them to accumulate the amount of wealth necessary for crucial life milestones.
Their parents—especially Baby Boomers—have generally accumulated much more wealth and are usually sitting on massive home equity, which makes them willing to help their struggling children. But the higher cost of living, fears of rising inflation, uncertainty around the U.S. economy and the future of Social Security are affecting them too—and helping their children is often stretching them thin.
What to Know
Savings.com, a website that provides money saving tips and financial comparisons, surveyed 1,000 U.S. parents of adult children in February 2024.
It found not only that 50 percent of them are still financially supporting their grown-up offspring, but they are also giving them more money than they used to: the average amount these parents are giving is $1,474 a month, about 6 percent more than last year and a three-year high.
As could be expected, Gen Zers—who are currently aged between 18 and 28—are receiving more money than millennials—aged between 29 and 44—, who have had more time to build up careers and increase their wages and savings.
Parents of Gen Zers are giving them an average $1,813 per month, while parents of millennials are giving them $863 per month.
What Are Parents Paying for?
This money goes to support younger generations in all aspects of their life, from putting food on the table to going on vacation.
Some 83 percent are contributing to their adult kids’ monthly groceries, the survey found, for an average of $220 a month; 65 percent are helping with cell phones for an average of $63 a month, and 46 percent with vacations for an average of $190 a month.
Some 54 percent of parents are helping their adult children by covering the cost of health insurance and health care for an average of $165 a month, while 63 percent are helping them pay their rent or mortgage for an average of $653 a month.
Help often comes with strings attached.
A majority of 77 percent attach conditions to their financial support, while 23 percent give money without any conditions.
Most parents (48 percent) who attached conditions to their financial support require their adult children to hold on to a job or actively seek employment, while 45 percent want them to pursue education and 26 percent to contribute to household expenses if living in the same home.
Can They Afford It?
Continuing to support their grown-up children comes at the cost of sacrificing their own financial security for nearly 50 percent of U.S. parents.
Working parents who support their adult children are giving them double the amount ($1,589) they put into their retirement funds ($673).
Most are doing it anyway because they feel like they have to: 40 percent said they felt pressured to give financial support to their adult children even if it meant stretching their own financial resources beyond comfort.
Getty Images
But while 35 percent of parents feel responsible to support their adult children financially, 50 percent do not. Eleven percent of parents helping their adult children plan on stopping in less than a year; 26 percent in one to two years; 28 percent in three to four years; and 16 percent in five or more years.
Another 18 percent plans on helping their adult children indefinitely, or for as long as they may need to.
Savings.com researchers are concerned about what helping their adult children could mean for U.S. parents should economic conditions worsen this year.
What Will Gen Zers and Millennials Do Without the Bank of Mom and Dad?
If the bank of mom and dad doesn’t dry out completely in the next two decades or so, Gen Zers and millennials stand to inherit a lot of money in the so-called “great wealth transfer.”
Economists expect the greatest intergenerational wealth transfer to take place in the U.S. within the next 20 years, as around $84 trillion in assets change hands from Baby Boomers to their Gen Z and millennial children and grandchildren.
Bank of America expects Gen Zers to become the largest and richest generation by 2035, a drastic change from their current situation, while by 2040 they will have accumulated $74 trillion in income.
