A recent study found that parents are spending twice as much on adult children than they save for their own retirement. Where is the money going? Where is it coming from? And, is there a better way? Our moneyman Paul Fain, president of Asset Planning Corporation, joins us now with financial tips for parents.
THE DATA IN THIS NEW STUDY IS EYE-OPENING:
- 79% of parents still provide financial help to their adult children, ages 18 to 34 years old.
- Annual Total: $500 billion (includes undergraduate education and everyday living expenses).
- $54 billion groceries/food
- $18 billion cell phone service
- 31% of young adults live with parents.
WHERE IS THIS MONEY COMING FROM?
- 50% Savings account
- 43% cut their own living expenses
- 26% take on debt
- 25% are pulling money from a retirement account.
WHAT IS BEHIND THIS TREND?
- Job market challenges
- Over-involved parents
- Children with Poor financial management skills
- Debt, illness, divorce, other
HOW CAN A FAMILY DEVELOP HEALTHIER MONEY RELATIONSHIPS?
- Have regular discussions about money
- Start early
- If a struggle, add a third party
- Set limits
- Stick to a budget
- Keep an emergency fund
- Continue to contribute to HSA, 401(k), IRA
Would you like more hands-on advice for your retirement planning? Contact us for help!
