It costs a small fortune to raise children and parents are all too aware of it—from food to clothing to daycare. But what would happen if parents suddenly found themselves in need of care? Now they’re the ones that need to be looked after.
It appears that Generation Z is joining the rollercoaster ride of life with a distinct twist: juggling their jobs, and education, and supporting their parents monetarily. Yes, it is true that over 50% of Generation Z is volunteering to help their parents. So let’s talk about what to think about before you jump into the conversation or consider needing some financial TLC from your young adults.
What’s actually happening?
A difficult atmosphere has been created for parents and their Gen Z children due to the rising cost of living, growing educational costs, and economic concerns.
According to a recent survey of young people in North America conducted by the professional writing and academic aid portal EduBirdie, over 22% of Gen Z claim they work while they study in order to support their parents financially.
However, as they begin their employment, pursue further education to master their fields, and frequently manage sizable student loans, these young adults are going through a pivotal period in their own financial journeys.
Parents must understand the special difficulties that their kids face and the sacrifices they are making in order to keep these issues balanced.
According to Jeff Rose, a certified financial advisor, some parents throw out the guilt card by telling their children, “I’ve taken care of you my entire life” or “I’m just requesting a small amount of assistance”—like you can’t support mom and dad?
Rose, however, disagrees that kids should always have to assist their parents. He told Moneywise, “It’s not [their] fault that you might have made some other financial choices, and those choices had some consequences.”
Nevertheless, here are some approaches that can be taken to initiate that conversation.
Let’s talk, really talk
Talking about money with your kids can be a bit of an awkward conversation, especially if you’re about to ask them for some financial help. We get it. But here’s the thing: the key to success is communication—it’s the secret sauce. Assemble in a cosy area where you can chat about anything. Express your understanding of the tightrope your child is walking by listening to their side of the story. As it happens, communication is a two-way street, so you need to adapt your approach.
Ask your kids how much money they can contribute each month if you need it for ordinary, everyday costs. Make sure you are not disrupting your children’s savings and only budgeting funds that are solely for necessities, not for special occasions or unexplained spending. Do not go beyond and rely on them for your luxuries, even if they are well off and have plenty of money to spare.
However, if the funding is needed for a one-time event like a trip to your hometown, a family function, a death in the family, a wedding in the family, or home construction and renovation, accept the money with the understanding that you will return it as soon as you can. It would be best to set a deadline for this after speaking with your kids.
University struggles and juggling acts
Your child is taking down monetary beasts along with fighting to get that ‘A’ on their mid-term exam. Consider how asking for aid can impact their academic performance before you do so. Ask yourself if you’re unbalanced with your actions. It’s critical to consider all of your alternatives and strike a balance between providing too much help and not enough.
Gen Zers’ willingness to help their parents is admirable, but parents need to consider the possible effects this may have on their child’s academic standing, emotional health, and future employment opportunities. It’s critical to strike the correct balance between academic obligations and family support, or it could really affect your child’s overall well-being and mental health.
Finding Plan B and C
Do your homework before putting in the big ask. What is it that you actually need? Be precise. Understanding your financial situation helps the conversation flow. Perhaps it’s time for you to learn together if you’re not very good at budgeting. It’s a group endeavour, right?
To alleviate the load on their kids, parents could also look into alternate options like government assistance programs or financial counselling. Eligible low-income families can get time-limited cash assistance through financial assistance aids like TANF (Temporary Assistance for Needy Families).
Well, what about parents who still help their young adults out too?
A new Federal Reserve survey indicates that a considerable proportion of individuals live with their parents to support them financially, despite the fact that many of them claim to do so in order to save money. Of the 14 % of American adults who live with their parents, 33 % are between the ages of 22 and 24 and 42 % are between the ages of 25 and 29. Generally speaking, those in their mid-20s are the eldest members of Generation Z.
However, according to Jeff Rose, Gen Z adults who live with their parents should only be accountable for their fair part of living costs, such as rent and groceries, just like they would be if they were living alone.
He has also witnessed a lot of parents who pay for their kids’ college education without thinking about how it would affect their own financial objectives, like retirement.
Rose noted that this might be deducted from the compound interest you could earn from your assets over time. “Here they are, diverting all these extra funds toward paying for their kids’ college, when the reality is they can’t afford it,” Rose said.
He thinks it’s imperative that parents and their children have these kinds of money discussions. It must be made clear in advance, for instance, if the parents offer to pay their children’s tuition now in exchange for their contributions to their retirement funds in the future.
There you have it, parents: a how-to guide for negotiating the pitfalls of approaching your Gen Z superhero for financial assistance. Remember, this isn’t just about the money, even though the Benjamins play a significant role in our lives, what’s more important is how children and their parents connect on a heart-to-heart matter.
(Tashia Bernardus)