Home Personal Finance A lot of young adults aren’t financially independent. Here’s what parents can do [Video]

A lot of young adults aren’t financially independent. Here’s what parents can do [Video]

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In theory, parents teach their children the skills to become independent adults, but new research suggests that in practice, they don’t.

In a recent Experian survey of 2,008 adults aged 18-42, more than half said they were still financially dependent on their parents, and two-thirds said they I feel ashamed that I have to ask for

The report reveals how young people these days struggle to establish themselves.

“This is very important because we want to understand how we can best serve Gen Z and millennials. It’s very important to know how you manage your finances,” manager Christina Roman said. Consumer education and advocacy efforts at Experian.

According to the study, 61% of Zomers and 47% of millennials still feel financially dependent on their parents. Survey participants also said they struggled with “impulse buying.” Nearly 57% said they find it difficult to say no to something they want but don’t need.

Read more: How much should I have in my emergency savings account?

Fortunately, experts say there are steps parents can take to help their adult children become more financially independent.

please proceed slowly

“Parents should cut off financial support for their adult children gradually, not all at once,” said GenWealth financial adviser Teresa Arrigo. That’s because adult children tend to lack the experience of budgeting and running without external funding to supplement their income.

For example, parents can ask their young adult children to pay part of the phone bill and increase that amount over several months until the full amount is paid, she said.

“Rather than saying, ‘You are alone, get out,’ it is very important to come up with a plan together to stop helping over a period of time. I think it’s healthier for your relationship that way,” she said.

Unrecognizable woman checking monthly expenses by category while having coffee break in cafe, using modern financial mobile application on smart phone, copy space, creative image

Financial planning apps help you create and stick to your budget.

Seek outside help if needed

Arrigo said parents should consult financial planners before sending their adult children out on their own. A financial planner can teach you how to save and budget effectively, she says. She also said she might be able to provide her children with a household account book app to help them stand on their own feet.

“If your kids aren’t in the habit of budgeting, you have to learn how to do it. “Or have him subscribe to one of the budgeting tools you need to get started down the road.”

Why are young people so stuck? An Experian survey found that 37% of participants said their parents didn’t teach them about money problems, and 44% said their parents were bad spenders.

“Maybe they were avoiding it because they didn’t want to appear bragging or share their mistakes,” Arrigo told Yahoo Finance Live. Told. “But if you are honest, there are many great opportunities for children to learn.”

Tarriga said one of her clients, a debt-stricken father, confided in his 19-year-old son about his financial blunders. Her son, now 25, has changed her mind and is going to buy her first home for cash, she added.

set boundaries

Meanwhile, Katherine Varega, financial planner at Green Bee Advisory LLC in Boston, stressed the importance of setting ground rules and giving adult children responsibility.

For example, she encouraged parents to consider having children who live at home handle grocery shopping and meal preparation several nights a week. She also said she should even consider asking for rent.

But that doesn’t mean parents should be insensitive or ignorant of their children’s needs, Varega added. Children should consider the realities of their own financial situation when setting expectations, in order to make them feel proud that they are not just free-roaming. ”.

She added, “What you don’t want is a relationship where your adult child isn’t developing the life skills and confidence to manage themselves. Parents don’t do that.” everytime there. “

Dylan Kroll is a reporter at Yahoo Finance.

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