Most Georgia parents support adult children financially, part two
As we discussed earlier this week, approximately 60 percent of parents now provide financial support for their adult children. Certainly, college graduates and other twenty- and thirty-something adults face unique difficulties in this economy, with a dismal job market and increasing student loan debts. However, financial experts have expressed concerns that this practice could end up harming both parents and children in the long run.
Of the 1,000 parents surveyed, approximately 43 percent stated that they offer financial assistance to their child or children because they are “legitimately concerned” for their kids’ financial welfare and security. In addition, 37 percent said that they have struggled financially in the past, and that they want to protect their children from the difficulties and hardships they faced.
According to psychologist Vivian Diller, Ph.D., the latter reason may have more to do with parenting trends than the economy. “In the last 20 to 30 years, the family structure has become more child-centered,” she said. “Boomer parents were very willing to make sacrifices for their kids.”
While a parent’s desire to protect their children is wholly understandable, financial experts caution parents to protect themselves – and their futures – as well. Approximately 26 percent of parents who responded to the survey reported that they have taken on additional debt since they began supporting their children, and seven percent have delayed their retirement plans.
With the current uncertainty around Social Security and retirement funds tied to the stock market, parents need to keep their own financial futures in mind when deciding how to help their children, says Suzanne de Baca of Ameriprise Financial. De Baca recommends setting clear expectations when loaning or giving children money, and says that parents should always have a plan. “Compromising your financial security is a mistake,” she said. “If you can’t take care of yourself, you won’t be able to help your children in the long run.”
Source: Forbes, “Nearly 60% Of Parents Provide Financial Support To Adult Children,” Jenna Goudreau, 20 May 2011