Daddy, can you spare a dime? Apparently, many do — and much more than a skinny coin. One out of six American adults receive financial support from their parents or other family members, who chip in for everything from rent to basics like groceries.
Millennials are delaying major milestones like homebuying and marriage, and financial independence is included among those, according to research from Country Financial. One in three adults surveyed by the financial services company said they don’t believe they should have financial independence until they’re at least 25.
That may be in stark contrast to how earlier generations viewed independence, adulthood and money. Today, six in 10 millennials are unmarried, or three times the rate of the silent generation (people now in their 70s and 80s), when the average marriage age was 21 for women and 23 for men.
But the U.S. economy has also changed since their parents and grandparents entered the workforce. The financial crisis and Great Recession hit millennials just as they were entering the job market — and many of them are also juggling hefty student loan repayments.
“They may have been unemployed or underemployed, and if you lose those early couple of years in your career, it takes a long time to recover,” noted Doyle Williams, executive vice president of Country Financial. “When I went to college, you could work a part-time job and pay your way through with a small student loan.”
He added, “What I found surprising was the response to the survey. People are saying they’re lazy or they don’t care or some other reason that’s negative, and I don’t think that’s the case.”
Millennials still playing financial catch-up to Gen X
Adult Americans who receive help from their families are “making rational economic choices,” he said. Balancing debt, underemployment and stagnant income, they may be hoping to forestall costs so they can build their careers and enjoy the payoffs later.
Some parents keep their kids on their cellphone plans or Netflix family subscription because it’s cheaper to carry these group plans than to ask each person to subscribe individually. (And it’s not only adult children who do this: Williams noted that he’s on his 25-year-old son’s Netflix account.)
Sharing entertainment subscriptions is a theme in Refinery29’s Money Diary series, a column in which millennials disclose their income and spending habits. In one recent column, an engineer earning a salary of $78,000 per year noted that her parents paid for her car and she spends nothing for Netflix — because she uses her parents’ password.
It’s not only millennials who are still relying on mom and dad for financial support, according to Northwestern Mutual, which ran its own survey about American financial habits earlier this year. The financial services firm found that 15 percent of the adults who receive help from family members are 35 to 49 years old, or Generation X.
“What was striking to me was the idea of the 35- to 49-year-old group, they had the impact of the 2008 crisis,” said Emily Holbrook, director of personal markets at Northwestern Mutual. Gen X adults “are looking at divorce and child care payments. Even if your earnings have gone up, disposable income is getting squeezed.”
Giving up money for happiness
Across the board, 16 percent of Americans — or one in six — receive financial support from parents or other family members, Northwestern found. The top categories of expenses that adults get help with are bill payments, such as credit cards, mobile phones and cable bills, basic necessities such as food and clothing, and housing costs.
In Holbrook’s view, part of the problem is a systemic change in financial risk from corporations and governments onto individuals. Previous generations could rely on pensions from employers, while college costs were much lower, she noted. Now, Americans are accountable for managing and saving in their own retirement plans, and the skyrocketing cost of college leaves many adults saddled with debt.
Parents and other family members naturally want to help struggling adult children, yet Holbrook said the first place to start is a discussion about budgeting, emergency funds and creating a financial plan.
And helping adult children will ultimately backfire if the parents haven’t saved for their own retirement. That’s not all that uncommon. Northwestern found that one in five Americans have no retirement savings.
“People need to have a level of financial discipline,” Holbrook said. “Ultimately, all parents want their children to be set up for success for life.”
Maybe it’s not just liberals having trouble moving past intellectual and emotional adolescence. The more I see the more I think it may be symptomatic of the nation as a whole.
Almost every boomer I know, my parents included, go through money like shit through a goose. No handouts for this kid.
goes
More American stupidity. If your kid is 25+ years old and is unable to live independently, you are not helping them by paying their bills. Time for some tough love and for the kid to wake up to reality. Start by getting rid of anything that is not essential, e.g. Netflix, cable TV, $50+ cell phone plans, dining out, driving fancy (leased) cars. Those are luxuries you have when you have disposable income. You don’t have any if your parents are paying your bills.
I swear a lot of people in this country have lost the f-ing minds, if they ever had one to start with.
Free stuff for people pretty much is the same as giving food to cats. Both will just keep showing up for the moar gibs.
These Millennials can’t pay their bills because of these things they can’t afford:
1) Credit Card debt- If you can’t pay it off each month, you are spending too damn much!
2) Car debt: That’s a no brainer, and few of them can afford what a new car is selling for these days.
3) COLLEGE LOAN DEBT: They blew money for Degrees in Worthlessness, and had they worked HARD
for a degree that could pay big bucks, they could have been fine. Most weren’t college material, and had they learned a skilled trade they would have been making good money on a low investment with no debt.
The rules for them are the rules for us and everyone else and it’s always been this: Don’t blow your money and stay the fuck out of debt!
Keywords: Budgeting, financial discipline, and savings.
Difficult, rare characteristics indeed.
Discernment of needs vs. wants.
Too many lack the habitual requirements to a debt free lifestyle.
(A) Families help each other; my in-laws gave me a good deal on their used SUV when they downsized for retirement. This should go on ALL THE TIME and AT ALL AGES for those who care about their families.
(B) My nearly-31 year old is saving up for her future; right now she’s paying rent on my basement because it’s lots cheaper than renting commercially and she can bankroll faster, and the money stays in the family (we treat her to various things as we go). It doesn’t make sense to pay more for a living space to a stranger, and we are helping her to build her finances until she does leave.
(C) My boy is two semesters short of an IT degree; he took longer for a B.S. than I did for my Ph.D., and isn’t quite independent yet. But better that than a useless degree in ____ Studies, and he will probably write his own ticket when he graduates. Slow and steady will win his race!
Rigid guidelines like “by the time you’re XX you should be YY” work in armies, bureaucracies and charitable organizations, but families have to be flexible – or watch your investment in your children go away into drugs, crime and futility. KNOW what your children are capable of, and push them (gently) to increasing that capacity every day.
@James
Thank you for your personal stories.
I wish more family members thought like you. Much appreciated.
Good post, James. Keeping the money in the family. Very important. and what did we think was going to happen as a country when we let our jobs get shipped overseas, puffed up housing prices, and destroyed the nuclear family?
Bingo. Say what you will about the Amish, but they aren’t affected by any of the above and are looking like they were right all along.
One of our kids (30 y.o.) moved back into the apartment on July 1 after losing his job, and another one ‘borrowed’ $250 from us on Wednesday.
We are ready to retire and leave -right here right now, but not sure the kids are in a position to survive without backup.
I left home on a road trip at age 17 and made a life for myself and sometimes it was hard and poor and grubby, but I was determined to create my own livelihood in the world. Back then there was little in the way of government handouts and the prospect of dismal failure was real. Real enough that you knew you had to work your ass off if you wanted to stay alive.
Stanley – no one dies because mommy and daddy pull the teat. Your “not sure they are in a position to survive” worry is misplaced.
It’s practically illegal to starve to death in the U.S. Do you recall the last time you heard of anyone starving in our nation or even read about someone starving here? We get plenty of sob stories in the “news” about homelessness (which is truthfully a mental illness problem, but we love denial of reality, so…) but if you look around you’ll notice supposed “bums” that are overweight who own smartphones.
Grow up. I’m truly sorry that it is so seemingly difficult to become a respectable, living-earning gentleman or a capable, maternal lady in our society–but this is NOT going to go well for us until we realize we’re going backwards at this point.
Taxation – I am considered heartless by many. Why?
Because I do not want ANY govt money spent on welfare. Zero. It is not the place of govt. That means no food stamps, medical care of any type, SS, unemployment, farm subsidies, etc.
These issues should either be 1) personal responsibility, 2) family responsibility, or 3) funded via private charity.
The number of able bodied receiving welfare is high. Stop it. The number of elderly receiving welfare who have able bodied family is high – make their family responsible, not me, plus they should have planned for their own damn future. Same goes for disabled folks – make their families responsible.
So after that, you are left with disabled and no family, and some children. Private charity can easily take care of that small per cent.
Forcing me, or anyone, at the barrel of a gun to take money out of my pocket and give it to someone else is a crime in my opinion. What is in my pocket should be for me and mine, and for my and our future.
Taking my money and promising me that hey, if you ever need help, we will help you too is bullshit. If they do not rob me to pay for someone else, odds are a lot better I can take care of me and mine.
If we are honest, we take care of our own first. If there is profit, we can choose to help others. So much agreement with you here on my side.
Not heartless, Llpoh. Just missing one big concept. We either protect our jobs and industries from foreign competition, or we have a welfare state. One or the other. There is no other way.
‘poh, I respect many of your experienced viewpoints, as harsh as they may be to some.
That said, I had a conversation w/ a magistrate friend once.
In talking about SS, and whether people of surplus net worth should be eligible for SS bennies at 62+, he said: “no offense, but I don’t want to have to pay for your Mom’s care in her old age if she absolutely doesn’t depend on it”
i.e, taxing his wages to pay for someone in a pool of people who don’t really need assistance seemed unfair.
And to an extent, I can agree.
But on the flip side of that argument, her and my old man paid into that system for years, and I justified Ma’s qualifying for SS benefit monies based on that.
Dad passed early, at 59, and his pension bennies went to Ma, but it was meager by today’s inflationary standards.
Did she need the SS money? No.
But should she have been ineligible to receive them, because she didn’t need them?
I’d argue that’s BS, cuz it’s unfair that during all my parent’s frugal years they sacrificed, and denied themselves the luxuries of life that the broke people spent for, pissing their monies away, and not saving for a rainy day. Why the double
punishment?
We know the gov is never going to stop taxing for the program that Johnson established, that has morphed into a monster ponzi.
Now in the perfect setup, SS and FICA would be an opt in or out program…you don’t have to pay in, and don’t get any bennies, because you’re a disciplined saver / investor / businessman.
If you fail, you’re shit out of luck, and must depend on family or charity based benefactors, having opted out of the pay-in.
But that’s not an option. We are forced to pay into it.
Alternatively, the 2nd best system would be to collect SS / FICA, but keep a running total balance that’s yours to retrieve, but limited to what you put in. But then, with interest, or not?
I get that there’s abuse of the system, which really is the root of the problem. Besides the fact that our politicos have tapped and zapped those funds for other pork projects, etc.
One such abuse is someone who worked 20 years paying into the system, who then lives 40 more years collecting out of it way more than they ever contributed is just one part of an unfair system.
Another being the people who claim, way before retirement age, legitimately or not, that they are disabled, and end up milking the SS system for many years, way beyond the amounts they paid into it.
It’s a messed up program, and I can understand Gen X, and Millennial’s feeling like they’re going to get hosed in this deal, and it’s fast becoming insolvent.
On top of all that, my personal story is, as a late stage boomer, I’ve been paying into the system since they started skimming my earnings in oh about 1973. So, for 45 years of wages.
I’m 58, and there’s no way I can retire with confidence right now, so, God willing, I plan on working and earning until I’m at least 62.
The trend I see is, SS bennies might not be there for me, starting in 2022, or later, if I roll the dice, when I decide to request SS checks.
Not being independently wealthy, I’ve made some mistakes, and am concerned about having enough to scrape by on, particularly if taxes keep rising and the SS / FICA funds run dry.
I don’t think it’s wrong to expect a certain amount of those monies back, in my sunset years, even if I have squirreled away a meager Net worth above what the destitute people have in their old age.
Thoughts?
Johnson? During his term at the helm the monies in excess went into the general fund to pay for Vietnam. I do agree with your points. I plan on taking at 62 as I would rather get less for longer if I live. I almost bought the farm this year at 59 so that brought home that one never knows when check out time is.
RIght. My bad. Too much Woodford Reserve tonight. FDR instituted SS. Good catch Sub.
The overwhelming message: Go to college. Your degree will pay for itself.
Ten years later, and there aren’t any jobs to be had and you’re drowning in debt. Thankfully I have been able to make my way without burdening my parents. But many of my peers haven’t been so lucky.
Meanwhile, illegals are having their food, housing, child care, and healthcare paid for on our taxes that we struggle to pay each year.
What a wonderful world we live in.
Port – people do not need jobs, they need to make a living. Jobs are one way, but there are many others.
There are always jobs in the government. Alexandria promises them for all.
Lgr – it was and is a tax. It was spent. Any money you get will come from the next gen by force. It has to stop. Raping the next gen for 25 years is immoral. They should not have done it to you. But that they did does not mean you should do it to the next gen.
Lgr – there are children not yet born that will be forced to pay your SS benefits. Man, that is some kind of wrong.
“Some parents keep their kids on their cellphone plans or Netflix family subscription”
Well there’s a big part of their problem………..a lack of realistic priorities. If you’re broke, unemployed or can’t pay your own way you don’t NEED Netflix, cellphones, cable, cigarettes, alcohol, weed, $2500 rims, big screen TV’s etc. What you NEED is food, water, clothing, shelter and basic transportation. Everything else is a luxury that should incentivize and encourage a person to improve their station in life to be able to afford such things.
Even with things improving people aren’t stepping up. There’s a long term construction project I drive by just about everyday. Since day one they’ve had a sign out looking to hire apprentice and journeyman carpenters and laborers paying prevailing wage. Jobs are fucking everywhere but few are applying even for good paying jobs. Unreal.
Saw these on Knuckledraggin tonight and thought they were TBP “on topic”.
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To paraphrase Margret Thatcher: It will be a bitch when they run out of other peoples money.
John Wayne: Life is hard and it is harder when you are stupid. It will almost be funny to watch it happen.
Anything to keep them from coming back. Ha ha. If they move in everyone has an easier time? Less demand for housing. Then it becomes affordable? Nah I doubt it.