Parents of Gen Z and millennials contribute more towards their adult children's bills—the major reason is quite common
The challenges that Gen Z and millennials are facing are significantly different from their older counterparts. Compared to the older generation, the younger generations are relying on their parents to help them with living expenses and this phenomenon has been increasing rapidly, per the New York Post. The rising cost of living and stagnant wages are some reasons behind the issue. As many as 50 percent of parents contribute financially to help their children survive in the economy in 2025, according to a report by Savings.com.
They surveyed 1,000 parents in the US who have adult children and found that the parents contributed around $1,474 on average for their children per month. The contribution every 30 days was $900 for millennials and $1800 for Gen Z. This allowance from their parents helps them pay for groceries, rent, cell phone bills and even vacations at times. Out of that, 83 percent of parents pay for groceries, 65 percent help with cell phone bills and 46 percent help pay for vacations. At the same time, Gen Z also carries the highest personal debt, at an average of over $94,000, when compared to the other generations, per a poll conducted by Newsweek.
"Gen Z carries more credit card debt than older generations due to a combination of rising student loan burdens, along with the skyrocketing cost of basic living, inflation that just won't quit and a lack of financial education," Kristy Kim, a personal finance expert and chief executive officer (CEO) at TomoCredit, told the outlet. Many young adults rely on their credit cards to pay for their everyday expenses and experiences, and it can be hard to keep up with the debt without any outside help. "Rising debt at a young age can trap individuals in cycles of high-interest payments, delaying major financial milestones like homeownership and retirement," Kim continued. The help from parents doesn't come without conditions, more often than not, per Savings.com. Around 77 percent have conditions tied to the financial assistance, while 23 percent do it without any conditions.
As many as 50 percent of parents have given up their own financial security to help their children, while many supportive parents feel obligated to help their adult children with their finances. Many parents have realized that the arrangement wouldn't allow them to save a sufficient amount for their own future. Also, most working parents who participated in the survey admitted that they put in twice the amount of money to help their children compared to what they put in their retirement funds. The arrangement of contributing to their adult children's finances might not go on for a very long time for many of them.
11 percent of the participants admitted that they might stop helping their children in less than a year, 26 percent might stop in 1 to 2 years and 28 percent would stop in 3 to 4 years. While 18 percent of parents would never stop helping their children with finances. The "money dysmorphia" (the need to show they are rich) that millennials face could also be a reason why they might be struggling with their finances. However, whether the arrangement ending with their parents will help them overcome it or not is a big question, per the New York Post.