Around 74 per cent of parents continue to provide financial support to their adult, working-aged children, despite financial handouts from parents “occurring to a lesser extent”, a new survey has revealed.
A survey by Australian comparison website Finder.com.au found that nearly three-quarters of parents provide financial aid to their grown-up children to help with large items such as first home purchases, rent, university fees, and white goods, as well as smaller items, such as bills.
The survey suggested that Victoria was the “biggest sponge state” with 65 per cent of people getting financial help from their parents.
Of the sexes, more women than men received financial help from parents, with daughters receiving “almost twice as much financial help with a significant purchase like a house or car” than their male counterparts.
Bessie Hassan, money expert at finder.com.au, said that parents often felt “obligated” to help their children, as nearly one in five people surveyed said they provided support to their children because they struggled to “manage their money”.
For example, the research found that while 12 per cent of parents supported ‘kidults’ as they saved for a home loan deposit, another 11 per cent of parents said they were supporting their children because they were in debt.
“It’s human nature that parents want to step in if their child is struggling to repay debt or if they’re unable to complete a significant purchase such as a medical expense or a vehicle,” said Ms Hassan.
She warned, however, against parents giving regular cash handouts to their children, as this “could lead to poor financial behaviour”.
“A big part of parenting is helping your children become self-sufficient, and money matters should be no different,” she said.
“Young adults can get into the habit of living beyond their means because they think Mum and Dad will always be there to get them out of hot water.”
The percentage of adult children receiving financial support, however, has dropped by 12 per cent over the last 12 months.
Ms Hassan suggested: “[I]f you insist on giving money to your child, consider making it a loan with strict conditions on when and how it is to be paid back.”
“Try to resist the urge to step in and instead allow your children to learn basic money management skills such as saving, budgeting and investing.”
[Related: Younger Aussies struggling with debt]