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During the pandemic, many adults turned to a likely safety net: their parents.
According to a report by Savings.com, half of parents with a child over the age of 18 provide at least some financial support, from buying groceries to paying for cell phone bills to health and car insurance.
These parents spend an average of about $1,000 a month on such expenses, according to the report.
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Young adults just starting out have faced significant financial hurdles in recent years, including an unequal job market, high student loan bills from school and rising housing costs.
In 2020, the proportion of those living with their parents (often referred to as “boomerang kids”) temporarily rose to an all-time high.
And yet 62% of adult children living at home don’t contribute at all to household expenses, Savings.com found.
Now, inflation poses new challenges to achieving financial independence.
For parents, however, supporting adult children can be a significant burden at a time when their own financial security is at risk.
“Even with the added responsibility of caring for adult children, parents must also care for themselves,” said Shelly-Ann Eweka, senior director of financial planning strategy at TIAA.
“It’s like sitting on an airplane and the flight crews say if you have to wear masks because of an emergency, you must put yours on first before helping anyone else.”
Spending money to support your adult children drains funds that could have been used for other financial goals, such as helping children. E.g. paying off debt, saving for long-term health care costs and saving for retirement, Eweka said.
As a general rule, you should set aside money for your retirement and emergency fund first, she added.
“It’s important to prioritize where you want your money to go.”
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