Most parents expect to pay for their children until they become adults. But many say they are still financially subsidizing their now-adult children, sometimes well into their late 20s and early 30s, according to a new report from the Pew Research Center.
Never mind that today’s young adults are more likely to have college degrees and earn more money on an inflation-adjusted basis than their parents did 30 years ago, according to Pew.
“Young adults are reaching some key milestones such as marriage and parenthood later in life, even as they exceed their parents’ generation when it comes to educational attainment, employment and wages,” Pew researchers wrote in their analysis.
At the same time, adult kids are also more likely to have student loan debt, and more of it than their parents did at their age. In 1992, the median student debt adjusted for inflation was roughly $6,000 to $7,000 among young adults, according to Pew. But in 2022, adults between 25 and 29 owed a median of $16,000 and those ages 30 to 34 owed $20,000.
The Pew report is based on two different surveys conducted last fall. One is of a nationally representative sampling of parents in the United States with adult children between the ages of 18 and 34. And the second is of a nationally representative sampling of adults in that age range who have at least one living parent.
For some parents, there is no empty nest
Financial help comes in many forms. Providing food and shelter, either free or at a discount, is a big one.
Pew found that about a third of young adults between the ages of 18 and 34 are still living with a parent.
More than half (57%) of those in the 18-to-24 age group said they were doing so; as did 21% of those ages 25 to 29 and 11% of those between the ages of 30 and 34.
Among those who still haven’t left the nest, nearly three-quarters (72%) said they contribute financially to the household in at least one way, with 65% saying they help pay for things like groceries or utility bills, and 46% saying they help pay the rent or mortgage. No indication was given as to how much they actually contribute.
When it comes to who are most likely to live with their parents among racial and ethnic groups, Pew researchers said there aren’t statistically significant differences for those in the 18-to-24 age range. But for those 25 or older, Hispanic and Black young adults are more likely to live with their parents than Whites and Asians.
Perhaps unsurprisingly, most young adults still at home (64%) said doing so had a positive impact on their personal financial situation.
And, generally speaking, most parents are not unhappy with the arrangement. A full 45% say the living arrangement has been positive for their relationship with their child; while 29% say it’s been somewhat positive.
Expenses that parents help their adult kids pay
A full 59% of parents said they financially helped an adult child in the past year, while 44% of adult children said they had received financial help from a parent in the same period.
Of those 44% of young adults, the majority (68%) were 18-to-24-years old. But 30% of adults between 30 and 34 also said they got a financial assist from a parent.
The money for all age groups combined was most commonly used to help pay for household expenses (28%), and cellphone bills and streaming service subscriptions (25%). Less common was help with rent (17%), medical expenses (15%) and education (11%).
Impact on parental finances
Helping an adult child financially may make a parent feel good about their relationship. But when it comes to the bottom-line impact on their own finances, the survey findings are mixed.
Among parents with an adult child still living at home, only 18% said it had a negative impact; 27% said it had a positive impact; and roughly 55% said the impact was neither positive nor negative.
But among parents who said they helped their adult children financially in the past year, 36% said it hurt their finances “at least some,” especially among parents with lower incomes.
Sometimes, it’s the young adults helping their folks
It is less common, but 33% of young adults surveyed said they helped their parents financially in the past year, while 14% of parents said they got help from their kids in that time period.
“Young adults with lower incomes (43%) are more likely than those with middle (28%) or upper incomes (19%) to say they helped their parents financially. Similarly, parents with lower incomes are the most likely to say they received financial help from their young adult children (29%), compared with 9% of those with middle incomes and 2% of parents with upper incomes,” according to the Pew report.
The reasons cited by parents for the help they received was a special circumstance (38%), recurring expenses (31%) or both (30%).
