Many millennials seem to have a difficult time cutting the cord with their folks, especially when it comes to money.
According to the new Bank of America/USA Today Better Money Habits Millennial Report, 40 percent of millennials get financial help from their parents, including 22 percent of 30-34-year-olds, and 20 percent of millennials who are married or living with a partner. A Bank of America press release said:
Many millennials and parents think millennials’ financial hurdles – from buying a house to saving for retirement – are more difficult than those faced by the previous generation.
This perception of hardship could be why today’s parents are lending more financial support to their adult children than previous generations.
Frankly, financial hardship is a reality for many millennials. More than two-thirds of millennials who attended college took out student loans. Many left school shouldering a heavy debt load only to face a tough job market, where finding work has often proved difficult.
So, many millennials rely on the “Bank of Mom and Dad” to help them make ends meet.
The most common expense that parents pay for an adult child is their cell phone bill, according to a recent study from The Principal Financial Group. Other expenses that parents often end up covering include car insurance, health insurance, rent, medical bills and gym memberships.
Some highlights of the Bank of America report include:
- Sharing the cost of education: Among parents who have a child who attended college, 1 in 5 (23 percent) pays for their child’s student loans. One in 10 parents took out an additional loan (on top of student loans) to help pay for their child’s education.
- Asking for help: Millennials aren’t afraid to ask for financial advice from their folks. Nearly half of millennials ask their mom and dad for advice at least somewhat often.
- Expecting the tables to turn: Forty-two percent of millennials think they’ll need to financially support their parents “a lot” or at least “some” as they get older, while just 18 percent of parents think they’ll need help.
If you want to know more about the financial realities faced by millennials, check out “Millennials Have No Savings; Here’s Why.”
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