Adult children are relying on their parents for money, and this is putting a drain on the nest eggs of two-thirds of parents, finds CIBC.
In fact, 25% of parents are spending more than $500 a month to help their adult children cover expenses, such as rent, groceries and cell phone bills. Further, 47% say helping their kids financially has hampered their ability to save for themselves, and 20% have delayed retirement.
Where the money goes
The most common form of financial support that parents provide their adult kids is free room and board at home (71%), but many contribute towards other bills as well, including:
- groceries/other household expenses (47%);
- cell phone bills (35%);
- car payments or vehicle related expenses (23%);
- rent for their adult kids to live elsewhere (17%); or
- debt repayments (12%).
“Living at home temporarily can be a smart way for young adults to save for the future or pay down student loans,” says Christina Kramer, executive vice-president of Retail and Business Banking at CIBC. “[But] these extra costs can be a burden that delay or prevent parents from meeting financial goals, and that’s why both parents and kids need to be mindful of their budgets.”
Here are some articles to help parents.