Amid widespread job losses and sudden financial turmoil in 2020, many adults have found a likely safety net: their parents.
A year and a half later, nearly a third of millennials, between 25 and 40, still receive financial support from their parents, according to a new survey from personal finance site MagnifyMoney.
Whether paying for their cell phone plan or covering car insurance, 55% of parents of adult children said they provide financial support to their children at least occasionally, according to the report. MagnifyMoney surveyed more than 2,000 adults in September.
During the pandemic, the number of adults returning to live with their parents temporarily reached an all-time high.
More from Personal Finance:
Billions of aid still available for tenants in difficulty
Singles are worse off financially, study finds
Are you in the right career?
Last year, 52% of millennials lived in their parents’ homes, according to Pew’s analysis of Census Bureau data, surpassing the previous record of 1940, when 48% of young adults lived with their parents.
The share of young adults living with their parents has jumped across the board for men and women, all racial and ethnic groups and in all geographic regions, Pew found.
In addition, many adults who did not return to live with their parents still turned to them for financial support.
Nearly half, or 45%, of parents of adult children have helped their children financially through the coronavirus crisis, according to another CreditCards.com poll.
Among these parents, the average amount they donated was $ 4,154.
âWe are seeing more and more parents donating money to their children, especially during Covid,â said certified financial planner Stacy Francis, president and CEO of Francis Financial in New York.
“The challenge is that without your kids being responsible for their financial future, you never teach them how to fish, you only give them fish and they will depend on it for the rest of their lives.”
For years, newbies have struggled under the weight of the school’s hefty student loan bills, now at an all time high, in addition to soaring housing costs, which have strained the finances of most. recent graduates.
During the pandemic, labor market inequality weighed heavily on this demographic group. And even if hiring is picking up, the unemployment rate for 25-34 year olds remains above the national average.
For parents, however, supporting adult children can be a significant loss at a time when their own financial security is threatened. From medical coverage to auto insurance, groceries and Netflix, these extra costs can derail even the best pension plans.
Of course, not all parents can afford to help, and in some circumstances financial support goes the other way.
About 21% of those surveyed by MagnifyMonday said they currently provide financial support to their parents, often in the form of rent or utility payments.
To become financially independent, Francis recommends taking immediate steps to live within your means and reduce expenses, if necessary..
âThink about your spending from March 2020 to March 2021,â she said. “We had the highest savings rate in decades – we can do it, we did it.”
âIt shows that while it’s not easy to cut your expenses, almost all of us have done it,â Francis said.