Every generation has a reputation. The Baby Boomers brought the “American Dream” to our collective imagination and Generation X brought an increasing number of women into the workforce. Now, millennials are bringing a revolution to how they handle money and how they perceive their parents’ role in managing that money.
Millennials tend to look at their parents and others in the Baby Boomer generation as friends and mentors, with three out of four in the younger generation indicating that their families provided them with financial assistance after college. Of these, more than two-thirds say they couldn’t get by without their parents’ help.
Parents seem to be in agreement.
A 2015 report by Bank of America found that parents believe it is more difficult for their children to support themselves financially than it had been for them. This is a striking contrast to the older generation, where only 35 percent of families provided continued financial assistance when they were in their 20s and 30s.
The type of financial support varies substantially. Nearly 30 percent of those receiving help accept health insurance and approximately the same percentage welcome assistance with purchasing a home or renting. Auto insurance was another big contributor, with 26 percent of young people receiving help to pay for it, and 23 percent getting help with utilities.
Nevertheless, millennials don’t intend to keep it this way. According to a survey of 1,000 adults from the Society of Grownups (I didn’t know that was a real thing), 41 percent of young adults anticipate providing monetary support to their parents within seven years. When the polling numbers expand to include everyone age 21 to 45, over half report an intent to provide financial support or say they already do so.
While there are as many theories for this shift in attitude as there are experts, many point to some common denominators. In part, dangerously low credit credit scores, along with the greater emotional interdependence may lead to financial dependence; both generations grew up in similar economic conditions, and a skepticism about traditional financial services leads the younger generation to count on parents more.