All parents want the best for their children and are willing to help any way they can. Once your child is grown and out on their own, a parent may still feel obligated to assist their child with expenses. This can go on for quite some time, eventually, parents wonder when is it time to cut the umbilical cord.
Millennials, between the ages of 25 and 35, were surveyed by Fidelity Investments. Some shocking results were found: 47% of millennials admitted their parents have aided them by paying some of their bills since they moved out on their own. The most common expenses included: cell phone bills at 21%, groceries at 20%, clothing at 16%, utilities and entertainment at 14% each, and rent or mortgage payments at 12%.
According to the Federal Reserve, 50% of Americans have less than $400 in their savings. The millennials surveyed averaged $9,100 in savings–exceeding the national average. More than half of millennials have some form of investment account and retirement savings. Clearly being financially prepared for the future. What does this mean for the parents? Are they sacrificing their own financial wellness to secure their child’s?
If your child has a steady income, it may be time to discuss their money situation. If a grown child has worry about taking full financial responsibility, then help them understand the basics: needs vs wants. A parent should not risk their own financial well-being if their child is fully capable of supporting themselves.
This article was originally written by Sam Tabar, an attorney, and capital strategist. He is located in New York City. Sam Tabar began his career as an Associate at Skadden, Arps, Slater, Meagher & Flom LLP. Afterward, he transitioned to business development and capital strategy.
Sam Tabar united with Bank of America Merrill Lynch to be its Director and Head of Capital Strategy for the Asia-Pacific Region. Later he returned to the legal field to join Schulte Roth & Zabel LLP to be a Senior Associate, dealing with hedge fins, fund information, and structure, as well as regulatory and compliance issues. Follow him on Twitter, and find Sam Tabar’s official website via this link.