Millennial parents get $11K a year from grandparents. Why that's not bad.
Are you wondering if this is another article bashing millennials for their entitled, free-loading, self-involved ways?
Sort of, but not really.
A TD Ameritrade survey of millennial parents between the ages 19 and 37 and people 50 to 70 with millennial children, showed that, yes, millennials, for the most part, receive a lot of money from their parents. But also, it showed the generation is making responsible decisions when it comes to personal finances, including delaying or drawing back on baby-making.
Millennial parents said on average, they received about $11,000 in the past year in financial support and unpaid labor from their parents. That includes everything from rent, paying the tab at dinner, picking up groceries and babysitting. More than half of millennial parents, the study said, get an assist from their parents for childcare and housekeeping on a weekly basis.
It's not so much a problem, said David Lynch, TD Ameritrade's managing director and head of branches, as it is a symptom of massive student loan debt, increased inflation and stagnant wages.
"I wasn't shocked," he said. "It really confirmed a lot of the things that we're seeing."
He expects the trend to continue.
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About half of millennial parents said they received financial support from their parents, which averaged to about $2,500 a year. The grandparents, on the other hand, say the number is more like $4,500 a year.
So whose at fault, the ask-and-shall-receive 20-somethings or the doting grandparents?
For the most part, millennials don't seem to need the money. Fewer than 20 percent said their lifestyle depends on their parents' checkbook. Also, there appears to be harmony between millennial parents and their folks. The majority of millennial parents that get the boost are grateful for it, and about three-quarters of grandparents are glad to help. About a quarter of millennials said they are embarrassed by the financial assistance.
But the support swings the other way too. About four in 10 millennials said they've given their parents a boost in the last year at an average of about $2,000.
So what's the solution? Lynch said it relies on solid, holistic financial planning for both millennial parents and their folks.
He suggested plans for each in dealing with these relationships.
Grandparents, he said, should ask themselves if they want to help. If the answer is yes, "then you need to make sure your retirement house is in order," Lynch said. "The last thing you want to do is be a burden on your millennial parent kids." The next step is to set clear guidelines and expectations on the assistance you'll give.
Millennials lean more on parents (but please don't call it mooching)
For millennials, Lynch said, "don't be ashamed, don't be bashful."
He said millennials should set their own ground rules and guidelines with their parents, then build a budget, make cuts and stick to it. He said he's encouraged millennials are starting families, which he said is proof they are optimistic about their futures.
"It's real easy to go, 'Wow the millennials need all this help,'" Lynch said. "Millennials are just faced with a situation where they need a little help when they're starting out in parenthood."
Here are some other takeaways from the study:
- Eight in 10 grandparents and two-thirds of millennial parents own their own homes.
- Six in 10 grandparents said they didn't wait until they were financially secure before having children.
- A third of millennial parents said they didn't wait until they were financially secure before having children.
- Nearly 80% of millennial parents believe they'll be as financially secure or more financially secure than their parents in 25 to 30 years.
- About half of millennial parents said they'd have more children if money weren't an option.
- On average, both millennial parents and grandparents believe it costs about $250,000 to raise a child to age 18. (The U.S. Department of Agriculture estimates it costs $245,000)
- A majority of millennial parents say worrying about finances is the toughest part about being an adult.
- About a third of millennial parents and grandparents saving for retirement are confident they'll reach their retirement goals.
- On average, millennial parents have about $9,000 in student debt and about $12,000 in other debt such as credit cards and personal loans.
- Grandparents have about $1,200 in student debt and about $13,000 in other debt.