Many Gen Z adults still get financial help from their parents
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Trusting your parents with money can help you become independent. However, experts say that if not managed well, it can also cause problems in your relationship.
Nearly two-thirds, or 64%, of parents of Gen Z children (ages 18 to 28) say their children are still dependent on them for money, housing or other support. 2026 Wells Fargo Coin Study. More than half of these parents, 56 percent, say the support has put a strain on their finances. The bank surveyed 3,773 U.S. adults at the end of last year.
“Support for the mid-20s and sometimes beyond is becoming more accepted, especially when it helps a young adult finish school, manage housing costs or prevent falling behind financially,” said certified financial planner Douglas Boneparth, president and founder of Bone Fide Wealth, a wealth management firm in New York City.
But Boneparth said parental support should be approached “as a plan, not a lifestyle.”
Find out the terms of your parents’ support
He said the support you get from your parents can come in a variety of ways. Elena van Steeis a sociology fellow at Harvard University focusing on parent-child relationships. Sometimes parents will share an expense such as rent with their children or want their children to work a job while getting help from them. Other examples include a parent selling their car to their child or charging them rent.
“Particularly in wealthier families, when parents can provide support but feel uneasy about it, they sometimes come up with creative ways to make the support more culturally acceptable,” Van Stee said.
In any case, you should ask your parents to be “very clear” about the terms of their contributions, said Boneparth, a member of CNBC’s Council of Financial Advisors.
Specifically, she said, you’ll want to ask your parents to disclose whether the aid is a gift or a loan. If your parents give you a loan, “treat it like a real financial arrangement,” Boneparth said. He said you need to know the total amount lent, the interest rate, when repayment will begin, and what your repayment amount and frequency will be.
If the aid is a gift, you’ll still want to know how long the aid might last and when the situation will be reevaluated, Boneparth said.
“A good rule of thumb is to review the arrangement monthly if support is ongoing and meaningful, or at least quarterly if the situation is more stable,” he said.
While these conversations may seem strange, “uncertainty is what fuels resentment on both sides,” said Tim Ranzetta, co-founder and CEO of Next Gen Personal Finance.
To avoid future arguments, it’s best to put these financial arrangements in writing, added Corey Seemiller, a professor at Wright State University and co-author of the book.Generation Z: A Century in the Making”
“For example, if parents agree to pay off their child’s student loans, it must be in writing,” Seemiller said. “If the child will live at home and pay rent, this must also be written.”
‘A finish line for everyone to see’
Ranzetta said young adults who receive financial support from their parents should also be open about their plans. “They should be able to show their parents a budget and a savings goal.” [and] “A specific timeline,” he said.
“This turns an open-ended situation into a finish line for everyone to see,” Ranzetta said.
Boneparth said you should have regular check-ins with your parents who are ready to share updates about your income, job search and debt repayment.
“The aim is to show that support is being used consciously and that there is progress towards greater independence,” he said.
‘Past support enables present and future independence’
Harvard’s van Stee said young adults often feel embarrassed about accepting financial help from their parents.
The support, he said, can trigger concerns that you’re falling behind traditional adult milestones or discomfort with your privilege of accessing this help when many others cannot. The share of Black adults receiving parental assistance is much lower than that of white adults. A study conducted in 2021 Findings from researchers at the University at Buffalo and The New School.
“Accepting parental support may be incompatible with the American cultural notion of meritocracy and the idea that people should earn their own success,” Van Stee said.
But it’s often the help of parents that allows children to eventually stand on their own two feet, he said.
“Past support makes present and future independence possible,” Van Stee said.
