Some parents spend more than $500 a month to cover their adult kids' rent,
groceries and other bills
TORONTO, Sept. 2, 2015 /CNW/ - Adult children
(non-students, 18 years and older) who continue to rely financially
on their parents are putting a drain on the nest eggs of
two-thirds (66 per cent) of parents who are feeling the
impact of these extra costs, finds the latest poll by CIBC
(TSX: CM) (NYSE: CM).
The poll found that about one in four parents are
spending more than $500 a
month to help their adult children cover expenses such as rent,
groceries and cell phone bills and some parents say paying these
bills is cutting into their personal savings and causing them to
delay retirement, as well as their ability to travel and spend
money on themselves.
"Parents may have the will to help their adult kids but they may
not always have the means," says Christina
Kramer, Executive Vice President of Retail and Business
Banking at CIBC. "Having a serious talk about money with your grown
child can be a sensitive topic - an independent financial advisor
can help facilitate that conversation to assess how much help
parents can reasonably provide."
Highlights of the poll include:
- Two-thirds (66 per cent) of parents say they have felt
the financial impact of supporting their adult children while 34
per cent said they felt no impact
- Among those parents who say they are being affected financially
by supporting their adult children, 47 per cent say it has
hampered their ability to save for themselves and 20 per
cent say they have delayed retirement
- About one in four (23 per cent) parents who support
their adult children spends more than $500 a month while most spend between
$100 and $499
National data suggests that parents are increasingly supporting
their adult children. For example, the most current census by
Statistics Canada from 2011 found that 42 per cent of 4.3 million
young adults (aged 20-29) lived at home, compared to 32 per cent in
1991 and 27 per cent in 1981.
Where the money goes
The most common form of financial support that parents provide
their adult kids is free room and board at home (71 per
cent) but many contribute towards other bills as well,
including:
- 47 per cent - groceries/other household expenses
- 35 per cent - cell phone bills
- 23 per cent - car payments or vehicle related
expenses
- 17 per cent - rent for their adult kids to live
elsewhere
- 12 per cent - debt repayments
"Living at home temporarily can be a smart way for young adults
to save for the future or pay down student loans, and we know that
many parents want to help out their adult kids," Ms. Kramer says.
"These extra costs can be a burden that delays or prevents parents
from meeting financial goals such as retirement, and that's why
both parents and kids need to be mindful of their budgets."
KEY POLL FINDINGS
How parents say financially supporting their adult children
affects them:
Cut into personal savings |
47% |
Impacted ability to travel/spend on myself |
44% |
Delayed age of retirement |
20% |
Delayed selling or downsizing your home |
14% |
Financially supporting my adult child(ren) has not
impacted my lifestyle, future plans or current financial
position |
34% |
How parents are financially assisting their adult children:
Free room & board in my home |
71% |
Help out with groceries/household expenses |
47% |
Pay cell phone bills (voice & data plans) |
35% |
Car payments or vehicle-related expenses (full or
partial contribution) |
23% |
Rent (full or partial contribution) |
17% |
Debt re-payments |
12% |
Contribution toward a down payment for home
purchase |
5% |
Other |
21% |
Amount of financial support or assistance parents provide to
their adult children, per month:
Less than $100 |
10% |
$100 - $249 |
24% |
$250 - $499 |
31% |
$500 - $999 |
16% |
$1,000 or more |
7% |
I don't know |
11% |
From August 7 to 11, 2015, an
online survey was conducted among 1,054 randomly selected Canadian
parents that are financially supporting adult children
(non-students, age 18) who are Angus Reid Forum panelists. The
margin of error - which measures sampling variability - is +/- 3.02
per cent, 19 times out of 20. Discrepancies in or between totals
are due to rounding.
About CIBC
CIBC is a leading Canadian-based global financial institution with
nearly 11 million personal banking and business clients. Through
our three major business units - Retail and Business Banking,
Wealth Management and Wholesale Banking - CIBC offers a full range
of products and services through its comprehensive electronic
banking network, branches and offices across Canada with offices in the United States and around the world. You
can find other news releases and information about CIBC in our
Media Centre on our corporate website at www.cibc.com.
SOURCE CIBC