millennials

Parents Expect To Support Adult Kids Longer Than Kids Think … But Also Find It More Embarrassing

support adult kids

Millennials and Gen Zers tend to think that they’re going to be financially independent by age 22. Parents expect to support adult kids longer than that. However, parents find it embarrassing to support adult kids much more so than the kids themselves do.

When Kids Plan To Be Financially Independent

The Young Money Survey asked,

“At what age did you become, or expect to become, completely financially independent from your parent(s)?”

On average, both young millennials and members of Gen Z said age 22. That’s the age many kids graduate from college, so it makes sense on paper.

That said, there was some wide variation. 42% of Gen Zers and 34% of millennials expect financial independence by the age of 20. On the other end of the spectrum, 9% of Gen Zers and almost twice that many young millennials don’t anticipate financial independence until age 30.

Moreover, 2% of millennials say that even after age 30 they will not be financially independent from their parents. There were no Gen Zers in that category. Is that because they’re a generation that’s better with their money? Alternatively, is it because they’re young enough that age 30 seems impossibly far off?

How Long Parents Expect to Support Adult Kids

Most parents didn’t think that their kids were being realistic with those ages. More than nine out of ten parents surveyed expect to support adult kids to the age of 25.

Parents who have to support adult kids much longer than that are embarrassed by the idea. On average, they say it’s embarrassing to support adult kids past the age of 27. In fact, 60% of parents say it’s embarrassing to support adult kids between the ages of 20-29.

Only 25% of parents say that it’s okay to support kids up to age 29 but that sometime in the next decade, it gets embarrassing. A few parents aren’t embarrassed to support adult kids later in life. 4% said it gets embarrassing between ages 40-49 and 3% said it starts getting embarrassing after age 50.

Kids Aren’t as Embarrassed to Receive Support

Members of both Gen Z and the Millennial generation say, on average, that age 30 is when it starts to get embarrassing to receive financial parental support. However, more than a third don’t find it embarrassing until sometime in their 30s. 8% of young millennials and 9% of Gen Zers say it’s not embarrassing until you’re in your 40s. And 5%+ say it’s not embarrassing to receive financial support from parents even after the age of 50.

Other Survey Findings

So, the younger generations expect to be able to support themselves sooner, even though they aren’t embarrassed if they can’t.

Here are some of the other findings from the Young Money Survey:

  • Most of these kids expect to earn as much as, if not more than, their parents.
  • About two thirds of them are setting aside savings, but most of them are saving less than $200 per month.
  • About 1/3 of millennials and less than 1/4 of Gen Zers have emergency funds set aside.
  • Fewer than half of millennials and less than one third of Gen Zers have and follow a budget.
  • 2/3 of those surveyed would rather contribute to their own retirement than donate to charity.

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Homebuyer Regrets: 5 Reasons Millennials Wish They Hadn’t Bought a Home

homebuyer regrets

There are a lot of reasons why you might have homebuyer regrets. Although owning a home is one of the hallmarks of success for the middle class, it’s not without its problems. Millennials, in particular, have discovered that their financial situation is shaky. As a result, more than half of millennial home owners have homebuyer regrets. Here are five key reasons:

1. The Great Recession

Research indicates that millennials are considerably more likely to have homebuyer regrets than their Baby Boomer counterparts. The younger Gen Z has plans to buy homes young. So what’s going on with millennials? The great recession is likely a huge part of the problem.

This generation was already working, but not very far along in their careers, when The Great Recession struck. As a result, they were financially hit hard. If they’d already bought a home, they likely have found themselves struggling to make mortgage payments. The rest of their financial lives has just been too precarious.

2. They Didn’t Pay Enough Down

More than two thirds of millennials paid less than 20% for the down payment on their homes. This means two things:

  • They still owe a lot of money on their home mortgages.
  • Their mortgage payments are higher than if they’d paid more down.

Both of these things have led to some big homebuyer regrets.

3. They Didn’t Plan for So Many Ongoing Home Costs

Buying a home is just the first step of the home ownership process. You also have to keep your home maintained, which costs money. You might need renovations. Additionally, you may have to use your homeowner’s insurance, which can lead to greater rates there over time. Many millennials seem to have failed to plan for these costs.

“Millennials are planning 49% more renovations than Baby Boomers over the next five years, but they’re also three times as likely to use a personal loan and twice as likely to use a credit card to finance their renovations than Baby Boomers.”

Almost half of them were surprised at the cost of maintaining their homes. And they were four times as likely as Baby Boomers to use their homeowner’s insurance in the past year. So, they are spending more money on maintaining and renovating their homes. Yet they don’t actually have that money, which means that they’re paying high interest rates on loans to cover those costs. It’s overwhelming.

4. Overall, Their Mortgages Are Too High

More than anything else, millennial homeowners resent how much money they pay towards their mortgages. Maybe they aren’t earning enough as they still try to recover from The Great Recession. Perhaps they have too many other costs in their lives, including children and exorbitant student loans. Maybe the choices they’ve made with down payments, mortgage companies, and refinancing have left them struggling financially. Whatever the reason, the number one cause of homebuyer regrets among millennials is the high cost of their mortgage.

5. They’re Still New to Home Ownership

More than 60% of millennials have only owned their homes for five years or less. Those first years are hard. You’re adjusting to paying a mortgage. You’re learning all that it takes to pay for and maintain a home. You may not be used to the higher energy bills and property taxes as compared to when you were renting. Perhaps, as time goes on, these same millennials will have fewer homebuyer regrets because they’ll have adjusted to what it means to own their homes.

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Why Aren’t Millennials Investing?

millennials investing

Why aren’t millennials investing?

Millennials investing seems to be a scarcity in this decade, but it doesn’t mean they shouldn’t. So what’s the problem? Why aren’t we millennials investing more?

I can’t speak for everyone, but I know personally, my top reasons for not investing in earlier years are as follows:

 

  • Lack of funds. When I first graduated college in 2009, I was feeling the recession along with many other freshly graduated college students.
  • Lack of knowledge. I never felt confidently enough to invest. I thought the risk was much too large and that the return would reflect this.
  • Lack of skill. I did not create a steady budget for myself nor did I have any type of savings. My personal finance skills were nonexistent.

Over the years, I’ve educated myself and learned the importance of investing. I’ve also improved my personal finances by taking the time to grow my savings and seek out financial opportunities. But, despite the improvement of the economy over the years, the rate of millennials investing is still low. Why is this?

Various studies show similar reasons as mentioned above as to why the amount of individuals that dedicate time to invest is lower than in previous generations. If parents were not encouraging or enforcing the investing, it seems to have rarely happened on its own. Or rather, it takes longer for it to happen on its own.

We need answers.

While this age group tends to be stereotyped as self-centered and entitled folk who are focused on instant gratification and all things digital, these studies portray a different (and more accurate) light. In addition to simply a lack of investing confidence, Merrill Lynch’s Private Banking and Investment Group’s survey on millennials and money shows that this generation is very careful in making investment choices. They want to be “shown the math.”

We want more control.

Merrill Lynch’s survey also found that trust is a big issue for millennials investing. In fact, 72% of the 153 young Americans surveyed stated that they are “self-directed in their investing.” We’d rather be the ones making the decisions than having an adviser we don’t trust working with our cash. We want to invest with people or resources we personally trust rather than just any certified professional.

We’re more conservative (when it comes to investing).

Millennials, in terms of money, have been compared to post-Great Depression era. We not only watched what happened to our parents in the early 2000’s due to the stock market crash and recession, many of us experienced it ourselves after college. Jobs were harder to come by, and therefore, our focus has shifted. We are just as concerned about our parents and their future as  they are with us. UBS Investment Bank’s 2014 survey confirms this notion. We do our research and are much less willing to take high risks with our money. Although high risk investments do often yield high returns, we are typically holding more than half of our assets in cash, according to the research.

Surprisingly, the results of these surveys show that it is more about being careful and not as much about student debt. We are still feeling the effects of the financial crisis, and this generation needs more education on the topic in order to confidently create a diversified financial portfolio. Millennials tend to have more short-term investments instead of long-term, and we also tend to care more about life experiences than substantial wealth.

The good news is that there are more online tools and resources to help educate and guide millennials on investing. WiseBanyan and Acorns are just a couple of examples of investing sites to get a beginner started. Additionally, if nothing else, young Americans should at least focus on a retirement account as their form of investing, whether it be a workplace 401(k) plan or a Roth IRA.

Knowing the importance of investing is the first step in this process, and it’s one that we need to know we can truly benefit from with the right tools and knowledge.

Are you a millennial who invests? What routes do you take?