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When Adina Caro-Green plans her financial future, there’s a variable that may have been less important to previous generations: her children.
The employee benefits broker said she has seen how rising education, housing and health care costs are creating financial challenges for her Gen Z son and his colleagues. One of the long-term financial goals of Bay Area residents is to fully pay off any rental property they may inherit and live in.
Karo Green, 45, said: “It’s especially difficult for children today. Seeing how difficult it is for my son’s generation motivated me to do what I can. “It was,” he said.
Caro-Green is not alone. A U.S. Bank survey of nearly 2,500 adults released earlier this year found that more than half (53%) of Gen I’m worried that it won’t happen. This compares to just 37% of parents across all generations.
Gen While most Americans are struggling with runaway post-pandemic inflation, parents in this age group are uniquely concerned about whether their relatives will be able to get by without financial aid.
The “worried” generation
Tom Tiegs, family wealth coach at U.S. Bank Ascent Private Capital Management, said Gen He said there is. Remarkably, they have witnessed four of the five largest stock market crashes in history in their lifetimes, he noted.
He said they were one of the first companies to use 401K plans primarily for retirement rather than pensions. Now, the group also questions whether Social Security and Medicare will last long enough to reap the benefits of the programs that have supported them throughout their adult lives, Tiegs said.
Tiegs said the customers he speaks to are “worried” but not “numb”, explaining that these customers have been through economic downturns before. Instead, he noticed a mindset among Gen Xers of being prepared to take any unexpected punch.
“For Gen X, it’s not just doom and gloom,” he says. “There’s also an understanding that we’ll figure it out.”
Gen In fact, in a US Bank survey, 79% said their children were able to manage their household finances “well”.
Rather, this financial stress stems from factors outside of parents’ and children’s control, Tiegs said. In addition to rising prices for everyday necessities like food, he cited rising housing costs as a factor that puts Gen Z in a more financially unstable position.
mom and dad’s bank
Karogreen said it’s common among parents she knows to give money to their non-adult children, especially given the high cost of living in the San Francisco area. She said these are particularly difficult times because of what she characterized as a tough job market for those entering the white-collar workforce.
Even the youngest person in an American company can be expensive. A study released this year by Savings.com found that parents who provide financial support to their children pay an average of $1,384 a month. When looking at just Gen Z kids, that number jumped to $1,515.
According to Margherita Chen, a mother and certified financial planner, this leads to questions about how long, and how much, parents will have to support their children until they reach adulthood. It is said that there is a possibility. The answer, she says, is simple but deeply personal.
“I would never say don’t help your child,” said Mr. Chen, CEO of Blue Ocean Global Wealth in Gaithersburg, Maryland. But “it’s important to set boundaries and limits when it comes to giving.”
Chen said parents should not support their children to the point that they themselves have exhausted their savings and are unable to support themselves in retirement. She also said parents can work to eliminate the stigma around discussing money and the shame around decisions such as living at home after college.
For those who have the means to help, she has found that clear guidelines can be a useful tool. For example, parents may set a cap on how much money they can give to a child who is moving out, or distribute the funds in stages over a predetermined period of time.
Given his experience with Gen X, Tiegs found that this generation thinks differently about their money and how they spend it. This is an equation that increasingly includes children and other family members, he said.
“They have a more holistic view of money,” Tiegs says. “It’s not just about balancing your checkbook, it’s also about understanding what you want out of life in the long term.”
