In line with a survey, greater than half of Technology X mother and father are anxious about supporting their grownup kids
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As Adinah Caro-Greene plans her financial future, there is one variable that may have carried less weight for previous generations: her child.
The employee benefits broker said she has seen rising education, housing and health care costs create economic challenges for her Gen Z son and his peers. The Bay Area resident's long-term financial goals include paying off in full a rental property that he can inherit and potentially live in.
“It’s especially hard for kids right now,” said Caro-Greene, 45. “Seeing how hard it is for my son’s generation motivated me to do what I can.”
Caro Greene is not alone. According to a U.S. Bank survey of about 2,500 adults released earlier this year, a majority – or 53% – of this generation's parents are worried. That compares with just 37% of parents of all generations.
Gen Most Americans are grappling with runaway inflation that has followed the pandemic, but parents in this age group are most concerned about whether their relatives will ever be without financial help.
A “worried” generation
The Generation In particular, he pointed out that they had experienced four of the five biggest stock market crashes in history in their lifetime.
They were among the first to use 401K plans primarily for retirement rather than retirement, he said. Now this group is also wondering whether Social Security and Medicare will last long enough to reap the benefits of the systems that have supported them throughout their adult lives, Thiegs said.
The customers Thiegs is talking to are “worried” but not so much that they are “paralyzed,” he said, explaining that these customers have experienced economic downturns before. Instead, he is with the generation
“It’s not all doom and gloom for Generation X,” he said. “There is also an understanding that we can figure it out.”
Generation Parents In fact, the U.S. Bank survey found that 79% of respondents said their children were able to manage their finances “successfully.”
Instead, this economic stress is due to factors beyond the control of parents or children, Thiegs said. Beyond the rising prices of everyday goods like food, he pointed to higher housing costs as a factor that has put Generation Z in a more financially precarious position.
Mom and Dad's bench
Caro-Greene said it is common among parents she knows to give money to their young adult children, especially given the high cost of living in the San Francisco area. It's a particularly difficult time, she said, because the job market is difficult for those entering the white-collar workforce.
Even for the youngest people in corporate America, the expenses can add up. A Savings.com survey released this year found that parents who offer financial support to their children spend an average of $1,384 per month. Looking only at Generation Z descendants, that number rose to $1,515.
This can lead to questions about how long or to what extent parents should pay their children's bills into adulthood, says Marguerita Cheng, who is both a mother and a certified financial planner. The answer is both simple and highly individual, she said.
“I would never tell you not to help your child,” said Cheng, CEO of Blue Ocean Global Wealth in Gaithersburg, Maryland. But “it’s important to have boundaries or limitations when giving.”
Cheng said parents should avoid helping their child to the point where they themselves deplete their savings and face problems in retirement. She also said parents can try to eliminate the stigma that comes with discussing money and the shame surrounding decisions like living at home after college graduation.
She has found that clear guidelines can be a useful tool for those who have the opportunity to help. For example, parents could set a cap on how much money they give to a child who moves or distribute the funds gradually over a set period of time.
Given the experiences of Generation X, Thiegs has found that this generation thinks differently about their money and how it is used. It's an equation that increasingly involves children and other family members, he said.
“They’ve evolved to have a more holistic view of money,” Thiegs said. “It’s not just about balancing your checkbook, it’s also about understanding what I want for my life in the long term.”
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