While attending college, I consistently provided financial support to my grandmother, who I affectionately call Big Mama. Whether it was paying for groceries during our shopping trips or covering the occasional utility bill, I wanted to ease her financial burden.
As I entered my late 20s, I took on the responsibility of paying her annual property taxes. Big Mama would never ask for assistance, but I knew it would bring her some relief. Despite being a skilled money manager, her small pension and limited Social Security income left little room for extra expenses.
I despise the stereotypes that label young adults who live with their parents as “failing to launch” or financially underdeveloped. The truth is, the high cost of living in certain areas makes it nearly impossible for them to achieve independence without sacrificing their short-term and long-term goals. It’s time to recognize that expecting adult children to fend for themselves in today’s economy is outdated.
But here’s a surprising fact: a significant percentage of people in their 20s live at home not just to save money for themselves, but to assist their parents financially. According to the latest survey conducted by the Federal Reserve on the financial well-being of American households, 33 percent of adults aged 22 to 24 reported living at home to provide financial support to their parents. This percentage jumps to 42 percent among 25 to 29-year-olds living with their parents. The younger group has seen a significant increase in this trend, with only 17 percent in 2017 reporting living at home for this reason.
It’s important to note that the survey allowed participants to select multiple answers regarding their housing situation. Therefore, it’s worth mentioning that the majority of adults in their early 20s (90 percent) lived with their parents primarily to save money, while the percentage dropped slightly to 87 percent for those aged 25 to 29.
The survey also revealed that 60 percent of adults aged 30 to 59 living with their parents were doing so to provide financial support. This demonstrates that the concept of the “sandwich generation” is evolving, and the stress associated with caring for aging parents remains prevalent.
If you find yourself in the category of young adults providing financial assistance to your parents and feeling overwhelmed, here are five crucial do’s and don’ts to consider:
1. Communicate openly with your parents about their financial situation. This may be an uncomfortable conversation, but it’s essential to understand how long your assistance will be needed. If they rely on you to pay the mortgage every month, it might be a sign that they can no longer afford their home. Discuss potential solutions, such as downsizing or finding more affordable living arrangements. Transparency is key to managing your shared financial responsibilities effectively.
2. Don’t enable bad financial behavior. If you witness your parents making reckless financial decisions, it may be time to let them face the consequences and take responsibility for their actions. It’s okay to set limits on the financial support you provide and encourage them to make better choices.
3. Avoid going into debt to help your parents. Although it may feel like your responsibility to rescue them, jeopardizing your own financial future by accumulating credit card debt or co-signing loans is not the solution. Only commit to providing financial support within your means, and prioritize your own financial stability.
4. Don’t sacrifice your own savings goals or retirement plans. It’s tempting to divert your savings or retirement contributions to support your parents, but remember that securing your own future is crucial. Just like the flight attendants’ advice to put on your oxygen mask first before assisting others, prioritize your own financial well-being to avoid becoming overwhelmed by the financial strain of caring for your parents.
5. Research available financial aid programs and support services. There are numerous resources and organizations dedicated to providing assistance to caregivers and their aging parents. Explore options such as AARP or the Eldercare Locator to find helpful information and connect with professionals who can guide you through the process. Additionally, consider looking into financial aid programs that may alleviate some of the financial burden, like property tax discounts or prescription drug assistance programs.
Providing financial support to your parents is admirable, but it’s essential to find a balance that doesn’t compromise your own financial stability. Open communication, setting boundaries, and utilizing available resources can help you navigate this challenging situation with compassion and intelligence.
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