Young adults get by with a little help from their friends — and their parents’ bank account.
According to a recent survey, 35 percent percent of adults have at least one bill that’s still on their parents’ tab. Rent, groceries and utilities are the top three expenses their parents still pay for, with almost a quarter of millennials saying their parents fully cover their rent.
Yet despite not managing all of their expenses, 85 percent of respondents consider themselves to be financially responsible, with 65 percent considering having a good credit score as the indicator of financial responsibility.
There’s multiple reasons for young adults relying on their parents’ wallet. One of the major factors is the rising cost of, well, everything has outpaced incomes. Last year, the value of minimum pay rate hit a record low as inflation grew. The Economic Policy Institute found that a worker earning the minimum wage today makes over 27 percent less than they would have in July 2009, the last time the minimum wage pay increased.
Another factor behind young adults staying on their parents’ bill is due to a delay in pursuing financial responsibility. Seventy-three percent of respondents said they opened their first bank account by 25, 50 percent struggle with limiting unnecessary spending, 45 percent struggle with budgeting for unexpected expenses and 40 percent struggle to remember to pay bills on time.
But 39 percent of young adults struggle to find resources or information that helps with their finances. Financial education is considerably lacking in public schools, and many young adults shared that learning financial literacy in school would have gone a long way.
Roughly 72 percent of respondents “vow” to take bills on their own bills within the next two years, but we aren’t holding our breath. In the meantime, 30 percent admit they’ll continue relying on their parents until told otherwise.
