They call them “boomerang kids” – adult children living at home with their parents for increased financial stability. It should come as no surprise that there’s been an increase in adult children living at home since the recession hit. But how normal is it, and how much are parents helping their kids through this tough time? More importantly, how do you know that what you’re offering your kids is too much?
1/4 of Adults are Currently Living at Home
Some interesting research from Harris Interactive and the National Endowment for Financial Education reveals that 23% of non-student adults aged 18-39 are currently living with their parents. That study showed that this is more common among male children (27%) than female children (19%).
A totally separate study performed at Ohio State University puts that number closer to 25%. That research indicated that these numbers have risen across the board over the last 30 years, except when the adult children in question have graduate degrees. The number of those living with parents has remained steadily around 8%.
No matter how you cut up the information, it seems clear that at least 1-in-4 adults under the age of 4o are currently living with mom and dad. Add in those who have recently lived with their parents but don’t currently and you’re looking at a whopping 40% of adults below the age of 40. The recession’s certainly been tough, but many are getting back on their feet, even as others are moving back home.
1/3 of Parents Have Adult Children Living at Home
Basic logic and the fact that the U.S. population has been steadily increasing over the last 50 years makes it easy to see that there are fewer parents than there are adult children out there. And if 1/4 of adult children are living at home, you can bet that number is higher for parents.
According to the Harris Interactive and NEFE poll, almost 1/3 (29%) of parents have adult children living at home. This means there’s a new kind of burden facing future retirees — supporting their adult children well into the maximum earning years when past generations were socking away the bulk of their retirement savings.
Surely these parents aren’t fully supporting their adult children living at home, though… Right?
Adult Children Living at Home Share the Burden
Thankfully, there seems to be a lot of mutual financial support happening among parents and their live-in adult children. Among the 40% of adult children who currently live at home or have lived at home recently, a hefty 75% of them have shared some of the financial burden of the family during that time.
- 52% help their parents pay for groceries or food.
- 34% help pay utility bills
- And a surprising 29% help pay the rent or mortgage.
How Much Support is Too Much?
Still, some parents out there are being taken advantage of by their adult children living at home. If you think your family situation might fall into that category, consider the following statistics, gathered from the 42% of adults living at home who are currently receiving financial assistance from their parents. (Again, the money flows both ways in many of these families.)
- Just 34% of live-in adult children get help from parents with expenses.
- Just 33% are given spending money.
- Just 23% have had their parents make emergency deposits to their checking accounts.
Additionally, not many parents are actively helping their adult children living at home to pay off debt:
- Just 16% of these adults have gotten help paying off loans from their parents.
- Just 13% of them have received money from their parents to pay off credit card debt.
- Just 10% have gotten help with the down payment of a home from their parents.
Here’s the bottom line: If you’re fully supporting your adult children living at home, or you’re paying off (non-student loan) debt for your kids to help them recover from their own bad decisions in the past, you might be getting taken advantage of. Ultimately, that may be alright with you. It’s impossible not to love your children and even harder not to want to help them in tough times — especially if there are dependent grandchildren in the picture.
Still, many financial advisors agree: If helping your kids financially is hurting your chances of retirement, you should stop immediately. At least consider the consequences. After all, if you spend your whole life taking care of your children financially and can no longer take care of yourself in old age, who’s going to?
Focus on having conversations with your adult children living at home about their finances. Continue teaching them to help themselves and encouraging them to pursue financial independence. If you do, your family could become stronger for it, and your kids and grandkids could end up being much more financially savvy than you were in your youth. Wouldn’t that be a nice boomerang to set in motion, with good financial sense coming back around for generations to come?
Are you an adult living with your parents? Do you have adult children living at home? How do you think about your finances and the family’s finances? How do you share the burden? Share your personal take anonymously below.