The so-called Boomerang Kid trend keeps
growing, now with significant long-term financial consequences for
them and their parents.
MINNEAPOLIS, April 30,
2024 /PRNewswire/ -- Now in its third
year, Thrivent's 2024 Boomerang Kids Survey reveals nearly
half the parents surveyed (46%) have had their adult children
"boomerang" back home to live with them at some point. Fifty
percent of them blame the rising cost of rent and housing. That's a
big jump from just 35% who said the same last year.
"This is a wakeup call that's gone unanswered," says
Chaz Black, Thrivent financial
advisor. "More young adults returning home underscores the enormous
– and growing – financial pressures they're facing after
graduation. The ripple effect it has on them and their parents is a
problem we can't afford to ignore."
Other data shows the breadth of consequences – from delaying
milestones to jeopardizing their financial futures:
- Drowning in debt: Many young adults are delaying
financial priorities because of student loan debt, like buying a
home (39%), saving for retirement (34%) or building emergency
savings (36%). Additionally, 28% of young adults with student loans
say they're currently living paycheck to paycheck, and only 22% say
their first job helped them pay down their debt.
- Parents feel the pinch: With adult children living
at home, parents deprioritize their own financial needs. For
example, 38% say they are struggling to pay off debt (up from 23%
from last year) and 37% find it harder to save for long-term goals
like retirement or housing, a considerable jump from 16% last
year.
- Not making the grade: Among parents who have an
adult child currently living with them, more than half don't feel
confident their child is ready to be financially independent: 55%
would give their kid a C grade or lower on financial readiness and
11% would give an F.
- One solution could be more education before taking on debt. An
overwhelming majority of both parents and young adults surveyed
(83%) believe high schools should teach a mandatory 'financial aid
101' course.
Thrivent's survey data points to the importance of having a
financial plan. Without one, it's hard for parents to know how much
they can afford to help their child. A financial advisor can help
parents create a plan that looks at everything they earn and spend.
This way, they can see how helping their child now might affect
their ability to save for things like retirement or healthcare in
the future.
Here are additional tips from Thrivent to help parents navigate
the situation and get on track financially:
- Set clear rules and stick to them – Parents should make
sure their child knows the limits to their support. They can do
this by having an honest conversation and developing a written plan
that covers: 1) how long they'll provide financial support, 2) what
the money should be used for, 3) who pays for what, and 4) how
their child will prove they're making progress financially.
- Teach good money habits – While their child is at
home, parents can teach them how to budget and manage money wisely,
set achievable financial goals, build an emergency savings fund and
borrow money responsibly. These evergreen financial lessons can set
the stage for long-term independence.
- Be a role model – Leading by example is a powerful
way for parents to teach their children about managing money.
Parents should involve their children in financial planning
conversations and explain the 'why' behind their decisions. This
will help their kids do the same once they start handling their own
finances.
Survey Methodology
This poll was conducted in
April 2024 among a national sample of
2,201 Adults. The aim of this research was to track consumers'
sentiment and experiences with student loans and, for those who are
40-65 years old with children 18-35, understanding if and how
having their adult children move back home and/or needing financial
assistance impacted them. The interviews were conducted online and
the data were weighted to approximate a target sample of Adults in
the United States based on gender,
education, age, race, and region. Results from the full survey have
a margin of error of plus or minus 2 percentage points.
About Thrivent
Thrivent is a diversified financial
services organization that helps people achieve financial clarity,
enabling lives full of meaning and gratitude. Thrivent and its
subsidiary and affiliate companies serve more than 2.3 million
clients, offering advice, insurance, investments, banking and
generosity products and programs online and through financial
advisors and independent agents nationwide. Thrivent is a Fortune
500 company with $179 billion in
assets under management/advisement (as of 12/31/23). Thrivent
carries ratings from independent rating agencies which demonstrate
the strength and stability of the organization, including an A++
rating from AM Best; an Aa2 rating from Moody's Investors Service;
and an AA+ rating from S&P Global Ratings. Ratings are based on
Thrivent's financial strength and claims-paying ability, but do not
apply to investment product performance. For information on these
ratings, visit the rating agency's website. Dividends are not
guaranteed. For more information about Thrivent,
visit Thrivent.com or find us on Facebook,
Instagram and LinkedIn.
Insurance products, securities and investment advisory services
are provided by appropriately appointed and licensed financial
advisors and professionals. Only individuals who are financial
advisors are credentialed to provide investment advisory services.
Visit Thrivent.com or FINRA's BrokerCheck for more information
about Thrivent's financial advisors.
About Morning Consult
Morning Consult is a global decision intelligence company changing
how modern leaders make smarter, faster, better decisions. The
company pairs its proprietary high-frequency data with applied
artificial intelligence to better inform decisions on what people
think and how they will act. For more information, please visit
morningconsult.com.
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SOURCE Thrivent