The new American adult: Mom and dad help pay the bills

Daddy, can you spare a dime? Apparently, many do — and much more than a skinny coin. One out of six American adults receive financial support from their parents or other family members, who chip in for everything from rent to basics like groceries.

Millennials are delaying major milestones like homebuying and marriage, and financial independence is included among those, according to research from Country Financial. One in three adults surveyed by the financial services company said they don’t believe they should have financial independence until they’re at least 25.

That may be in stark contrast to how earlier generations viewed independence, adulthood and money. Today, six in 10 millennials are unmarried, or three times the rate of the silent generation (people now in their 70s and 80s), when the average marriage age was 21 for women and 23 for men.

But the U.S. economy has also changed since their parents and grandparents entered the workforce. The financial crisis and Great Recession hit millennials just as they were entering the job market — and many of them are also juggling hefty student loan repayments.

“They may have been unemployed or underemployed, and if you lose those early couple of years in your career, it takes a long time to recover,” noted Doyle Williams, executive vice president of Country Financial. “When I went to college, you could work a part-time job and pay your way through with a small student loan.”

He added, “What I found surprising was the response to the survey. People are saying they’re lazy or they don’t care or some other reason that’s negative, and I don’t think that’s the case.”

Adult Americans who receive help from their families are “making rational economic choices,” he said. Balancing debt, underemployment and stagnant income, they may be hoping to forestall costs so they can build their careers and enjoy the payoffs later.

Some parents keep their kids on their cellphone plans or Netflix family subscription because it’s cheaper to carry these group plans than to ask each person to subscribe individually. (And it’s not only adult children who do this: Williams noted that he’s on his 25-year-old son’s Netflix account.)

Sharing entertainment subscriptions is a theme in Refinery29’s Money Diary series, a column in which millennials disclose their income and spending habits. In one recent column, an engineer earning a salary of $78,000 per year noted that her parents paid for her car and she spends nothing for Netflix — because she uses her parents’ password.

It’s not only millennials who are still relying on mom and dad for financial support, according to Northwestern Mutual, which ran its own survey about American financial habits earlier this year. The financial services firm found that 15 percent of the adults who receive help from family members are 35 to 49 years old, or Generation X.

“What was striking to me was the idea of the 35- to 49-year-old group, they had the impact of the 2008 crisis,” said Emily Holbrook, director of personal markets at Northwestern Mutual. Gen X adults “are looking at divorce and child care payments. Even if your earnings have gone up, disposable income is getting squeezed.”

Across the board, 16 percent of Americans — or one in six — receive financial support from parents or other family members, Northwestern Mutual found. The top categories of expenses that adults get help with are bill payments, such as credit cards, mobile phones and cable bills, basic necessities such as food and clothing, and housing costs.

In Holbrook’s view, part of the problem is a systemic change in financial risk from corporations and governments onto individuals. Previous generations could rely on pensions from employers, while college costs were much lower, she noted. Now, Americans are accountable for managing and saving in their own retirement plans, and the skyrocketing cost of college leaves many adults saddled with debt.

Parents and other family members naturally want to help struggling adult children, yet Holbrook said the first place to start is a discussion about budgeting, emergency funds and creating a financial plan.

And helping adult children will ultimately backfire if the parents haven’t saved for their own retirement. That’s not all that uncommon. Northwestern Mutual found that one in five Americans have no retirement savings.

“People need to have a level of financial discipline,” Holbrook said. “Ultimately, all parents want their children to be set up for success for life.”