More than half of parents are providing financial support to their adult children—roughly $1,500 monthly—according to a report from Savings.com.
Often, this support happens unintentionally. Perhaps your child is still on the family phone plan, so you’re covering their cell phone bill, or they remain on your insurance until age 26. You might also be paying for their car insurance if it’s bundled with your policy or the car remains registered in your name.
While your children are adults, many are still early in their careers. At the same time, the cost of living continues to rise, and entry-level salaries don’t stretch as far. Breaking it down further, working-age Gen Z (ages 18 to 28) receives more support—about $1,800 a month—compared to Millennials (ages 29 to 44), who receive around $860 a month, presumably because they are further along in their careers.
As a parent, it’s natural to want to provide more for your children than you had. While helping them is fulfilling, it often comes at a cost, straining long-term financial goals. Income is finite, and when support for adult children—averaging $1,589 monthly—outpaces retirement contributions of just $673 monthly, the risk to long-term security grows.
When developing your financial plan, it’s important to consider how much you’re spending on your children. A $1,500 monthly expense adds up to $18,000 annually and should be factored into your overall spending. It’s similar to paying for your children’s college education: if you can afford to do so, that’s wonderful—but not at the expense of your retirement. There are mechanisms like student loans, grants, and scholarships to help fund education; there are no loans to fund your retirement.
According to a Savings.com report, groceries and food were among the top categories where parents provided financial support. With the rising cost of food, groceries have become a significant expense, and many parents don’t want to see their adult children surviving on $0.39 packages of ramen noodles. However, many of us remember the struggle of waiting for the next paycheck to splurge on pizza delivery. To some extent, those struggles—and the lessons learned from overcoming them—fuel the drive to do better. You worked to get better jobs, became more disciplined in saving, and planned for the future because you didn’t want to return to those difficult times.
If providing for your children is an important responsibility to you, it should be intentionally incorporated into your financial plan. We often see investors plan for expenses like multi-generational family vacations or annual gifts. Some prefer to share their wealth while alive, allowing them to witness and participate in their children’s success rather than waiting to pass it along after death.
However, while the parental instinct is to take care of your children, the “Bank of Mom and Dad” can eventually dry up — making it critical to consider how today’s decisions will impact your financial security 10 or 15 years from now. About 47% of survey respondents reported sacrificing their own financial security for their children, with nine out of 10 parents saying they would make additional sacrifices to support their working-age children. If this is the case, all parties should meet with a financial adviser to review spending and assess how long assets are likely to last under current patterns.
If you have questions on how your spending will affect your retirement, the experts at Henssler Financial will be glad to help:
- Experts Request Form
- Email: experts@henssler.com
- Phone: 770-429-9166
Listen to the April 26, 2025 “Henssler Money Talks” episode.
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