Parents help their kids in a variety of ways, and that includes financial support, even when their children get older. Nearly half of millennials (46%) get some level of financial help from mom and dad on a monthly basis, according to a new survey released by Money Under 30.
Parents aren't the only source of financial help for millennials but they're the top pick to ask for help when kids are a little short of cash. Almost half (48%) of those surveyed turn to their parents first, followed by 13.57% who have taken a bank loan, 4.99% who have taken money from friends, and 3.79% who ask their grandparents for money. About a third (29.64%) have not asked for financial help.
Where are mom and dad helping?
While almost half of millennials have turned to mom and dad for financial help, they're generally not asking for a lot of cash. In fact, the biggest area -- 17.6% -- where help from parents is being requested is to pay for "cellphone bills." That's followed by groceries at 9.8%, rent at 6.49%, health insurance at 5.89%, and gas at 5.79%.
Blame student loan debt, the high cost of housing, and other inflated expenses that their parents didn't have to deal with. This has left many millennials discouraged as to whether they'll be able to achieve basic financial goals like buying a house, finding a dream job, or retiring earlier than their parents were able to.
In fact, 37.52% of those surveyed strongly agreed with the idea that they would achieve those goals later in life, while 41.52% agreed. Just over 20% either disagreed or strongly disagreed that they would buy a house, find a dream job, or retire at an older age than their parents did.
What can you do?
It's embarrassing to be an adult who needs to ask his or her parents for financial help for everyday things like cellphone bills. In order to stop doing this, millennials (or people of any age still taking money from mom and dad) need to have a financial plan.
The first step is understanding where your money goes. It's generally easy to track how much money comes in if you have a traditional salaried job. For gig workers or freelancers, it's more challenging, and you should generally use a six-month average, at minimum, while steadily tracking income so you can adjust to downturns.
Once you have the income line filled in, it's time to examine all the areas where money goes out. Ideally, you have a surplus, but since you're taking money from your parents, that's probably not the case.
If your finances are running a deficit, you have two options: spend less or earn more. Ideally, you would do both, but a good place to start is looking at what you spend money on and seeing if there's any low-hanging fruit -- i.e., things you pay for that won't hurt to sacrifice.
Once you understand your income and your spending, it's time to adjust one or both to produce a surplus -- which can be used to build an emergency fund and pay off debts. How you do that is personal. You might take on a side hustle or take in a roommate.
The how isn't that important. What matters is that you take the steps to spend within your means and/or increase your means so the bank of mom and dad can close.