A survey shows plenty of parents neglected their own finances in 2020 to help adult kids.
The COVID-19 pandemic has been hard financially on most people, but many parents of adult children were slammed with an additional expense: Supporting their grown kids.
That’s according to a CreditCards.com survey, which found that nearly half of those polled said they have helped their adult children out financially during the pandemic. And nearly 80% admitted they handed over money to their kids that they would have otherwise used to pay off debt, invest, save for emergencies and retirement or use for daily expenses.
1. Parents spent money they could have used themselves
Around 79% of people surveyed who helped their adult kids financially during the pandemic told CreditCards.com they would have used “at least some” of that money for their own financial benefit if they hadn’t given it to their kids.
Roughly 33% said they would have used the money they gave to their children to pay down their own debt. The survey also found that 27% neglected emergency savings, and 16% cut back on or stopped retirement savings contributions. Around 10% chose helping their kids out over investing during the pandemic.
2. Food and housing top the list of parent’s financial assistance
About 47% of parents surveyed said they gave money to their adult children to help pay for food, and 33% helped their kids out with rent, mortgage payments or other housing costs.
But parents helping their grown children didn’t stop there. Nearly a third (27%) paid for their kid’s cell phone plan, helped with car payments and other vehicle expenses (23%) and handed over money for entertainment (11%).
Find out: How to Teach Kids About Money
3. Parents paid their kids’ debts during the pandemic
While 33% of parents surveyed admitted they could have paid more on their own debt if they hadn’t given or loaned money to their adult children, around 21% helped pay their kids’ debts, according to the CreditCards.com survey.
Almost half (47%) of those surveyed by CreditCards.com gave more than $1,000 to their adult kids to help them with bills, debt or other expenses in 2020. The average amount given by parents who helped out adult children was $4,154. About 18% gave their kids more than $5,000, and 28% gave more than $2,500.
4. Income played a big part in how much parents gave
Of parents with incomes exceeding $80,000, more than half (56%) gave an average of $8,530 to their adult kids over the past 13 months. For parents with an income between $40,000 and $80,000, nearly half (49%) gave an average amount of $2,170, according to CreditCards.com. Around 42% of parents earning $40,000 or less a year also helped out their adult kids, giving an average amount of $1,403.
5. Amounts given vary by region
Parents helped out their adult children financially, no matter where the parents lived in the U.S, the survey found. However, average amounts given differed greatly.
“Parents in the South gave an average of $5,018, while those in the Midwest gave $4,234, residents of the West gave $3,573 and those in the Northeast gave $2,861,” according to the CreditCards.com survey.
Regional differences in amounts given may correlate with pandemic unemployment in different areas of the country, according to Credit Cards.com, citing a greater percentage of jobs lost in New York and other states than in the South.
Still not sure what kind of help you need? Let Debt.com match you with the right solution based on your situation.
Published by Debt.com, LLC