Parents of Millennials Likely Help Pay For These 6 Things

parents of millennials

The parents of millennials help their adult children pay for many different things. They foot the bill for everything from rent to vacations. In most cases, parents of millennials just offer some support. However, sometimes they pay the full cost of their adult children’s lives. Here are the six most common things that parents of millennials help pay for, according to a CNBC report.

1. Cell Phone

It’s no surprise that parents of millennials often help them pay their phone bills. Most likely, this is due to the ease, availability, and affordability of family cell phone plans. Kids are often already on the family plan when they enter adulthood, leave for college, or move out of the house. Parents may find it easy enough just to keep the kids on that plan. They’re used to paying that bill so it doesn’t feel like an added expense.

2. Rent/ Mortgage

13% of millennials report that their parents pay the full cost of their rent or mortgage bill each month. Many other parents help pay a portion of that housing cost. This is a big chunk of money. It’s certainly helpful to the adult kids not to have to pay the bill themselves. However, it can put a big strain on their parents.

3. Groceries

A large percentage of these parents pay for their adult children’s food including all of their groceries. Some of these kids might still live at home, in which case the parents are used to paying for all of the household food. In other instances, parents might pick up some groceries for their kids whenever they do their own shopping. But in other cases millennials buy their groceries on credit cards and their parents pay that bill when it arrives.

4. Automobile Costs

Millennials often get help from their parents when it comes to their cars. Parents might pay for some or all of the car loan. Alternatively, they may help out with car repairs when their kids can’t cover those emergency costs. Sometimes parents buy themselves a new car and pass the old one on to their adult children.

5. Vacations

It might be surprising that parents help their adult children pay for travel, but it’s a very common practice. In fact, it’s the third most common expense that parents pay a portion of behind groceries and the cell phone bill. In many cases, parents of millennials pay their vacation costs in order to spend time together as a family. Adult kids that have moved away may not be able to afford to travel back home without their parents’ help. The family might vacation together elsewhere each year. Whatever the reason, when millennials can’t afford a trip, they are generally comfortable asking their parents for financial help.

6. School and Student Loans

Many parents of millennials consider it their responsibility to pay for some or all of their children’s education. They pay the costs of tuition. They also help pay for books and other necessary supplies. Additionally, parents of millennials who have already graduated often help them pay back their student loans.

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Can You Imagine If You Never Retire? 1 in 4 Think That’s That Their Fate.

never retire

Many people are planning ahead for early retirement. However, that’s not the full picture of the American public. Despite the fact that lots of us think about retiring in our thirties, forties, or fifties, there are also plenty of people who don’t plan to retire early. In fact, according to one survey, one in four people think they may never retire.

People Who Think They’ll Never Retire

Twenty-three percent of those surveyed believe that they will never retire. 80% of those people were under the age of 50 at the time of the survey. That leaves 20% that were age 50 or older and couldn’t see retirement in their future.

The main reason that people assume that they’ll never retire is that they don’t think that they’ll be able to afford to stop working. They don’t have enough money set aside in savings or retirement funds. They still have bills to pay. Many don’t even own the home that they live in.

Plus, as people get older, they need more medical care. If they don’t trust that Medicare will cover their needs, then they may feel like they have to keep working. They figure they’ll just work until they die.

People Who Plan To Work Longer

There are plenty of people who think it’s unreasonable to assume they’ll never retire. However, they believe that they’ll keep working into their older years. Twenty-three percent of those surveyed believed that they would keep working past the age of 65, which is often considered “normal” retirement age.

Therefore, nearly half of those surveyed believed that they will never retire or that, if they do, it’ll be after age 65. Another 19% say they’ll retire at 65. Many people are are living longer and longer, which means a lot of years after age 65 during which they have to support themselves. If they don’t have enough money in savings then it may make more sense to keep working than to retire at or before 65. Approximately 20% of people age 65 and older in America are currently working or looking for a job.

Elderly People Are Often Forced to Stop Working

Unfortunately, the reality is that a lot of elderly people do stop working, even if they don’t wish to do so. They may think that they’ll never retire but then life happens. Circumstances conspire against them. They get injured or ill and can’t keep working. They get laid off and have trouble finding new work in a market that’s biased towards hiring younger people. Or perhaps they find themselves having to do caregiving for an elderly spouse. Whatever the reason, they end up retiring, even if they aren’t financially prepared to do so.

People Don’t Feel Ready for Retirement

Regardless of when they expect to retire, most people don’t seem to feel prepared for it. 45% of those surveyed said that they are not at all prepared for retirement. Another 33% said that they are only somewhat prepared. The good news is that younger people recognize that they aren’t prepared and people who are getting closer to retirement age feel a little bit more ready for that reality. Still, nearly one third of people over age 50 said that they are not at all prepared for retirement.

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Parents Expect To Support Adult Kids Longer Than Kids Think … But Also Find It More Embarrassing

support adult kids

Millennials and Gen Zers tend to think that they’re going to be financially independent by age 22. Parents expect to support adult kids longer than that. However, parents find it embarrassing to support adult kids much more so than the kids themselves do.

When Kids Plan To Be Financially Independent

The Young Money Survey asked,

“At what age did you become, or expect to become, completely financially independent from your parent(s)?”

On average, both young millennials and members of Gen Z said age 22. That’s the age many kids graduate from college, so it makes sense on paper.

That said, there was some wide variation. 42% of Gen Zers and 34% of millennials expect financial independence by the age of 20. On the other end of the spectrum, 9% of Gen Zers and almost twice that many young millennials don’t anticipate financial independence until age 30.

Moreover, 2% of millennials say that even after age 30 they will not be financially independent from their parents. There were no Gen Zers in that category. Is that because they’re a generation that’s better with their money? Alternatively, is it because they’re young enough that age 30 seems impossibly far off?

How Long Parents Expect to Support Adult Kids

Most parents didn’t think that their kids were being realistic with those ages. More than nine out of ten parents surveyed expect to support adult kids to the age of 25.

Parents who have to support adult kids much longer than that are embarrassed by the idea. On average, they say it’s embarrassing to support adult kids past the age of 27. In fact, 60% of parents say it’s embarrassing to support adult kids between the ages of 20-29.

Only 25% of parents say that it’s okay to support kids up to age 29 but that sometime in the next decade, it gets embarrassing. A few parents aren’t embarrassed to support adult kids later in life. 4% said it gets embarrassing between ages 40-49 and 3% said it starts getting embarrassing after age 50.

Kids Aren’t as Embarrassed to Receive Support

Members of both Gen Z and the Millennial generation say, on average, that age 30 is when it starts to get embarrassing to receive financial parental support. However, more than a third don’t find it embarrassing until sometime in their 30s. 8% of young millennials and 9% of Gen Zers say it’s not embarrassing until you’re in your 40s. And 5%+ say it’s not embarrassing to receive financial support from parents even after the age of 50.

Other Survey Findings

So, the younger generations expect to be able to support themselves sooner, even though they aren’t embarrassed if they can’t.

Here are some of the other findings from the Young Money Survey:

  • Most of these kids expect to earn as much as, if not more than, their parents.
  • About two thirds of them are setting aside savings, but most of them are saving less than $200 per month.
  • About 1/3 of millennials and less than 1/4 of Gen Zers have emergency funds set aside.
  • Fewer than half of millennials and less than one third of Gen Zers have and follow a budget.
  • 2/3 of those surveyed would rather contribute to their own retirement than donate to charity.

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