No One Wants to Talk About This (Gen X is in Trouble)
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Come on in. Take a seat. Well, not here. I'm sitting here, but find a seat. We need to talk. Things aren't going well because half of parents with adult children are giving them regular financial support. And look, it's one thing when your dad picks up the tab on a family dinner right after seeing the total and asking, is that the bill or my phone number? Ordered gratuity.

But it's completely different when your parents are consistently helping you pay your bills, because that can wreck both their financial life and yours, potentially to the tune of over $600,000. And today, you're going to learn how. Now, let me start by saying that parents have been financially supporting their adult children for decades. So this is not a new development, but it does seem to be getting worse. And thanks to a new study from Savings.com, we have some fresh stats to back that up. So here's the scoop.

Like I mentioned earlier, half of parents with adult children provide them with regular financial assistance. And of that group, 83% help with groceries and 65% pay for their kid's phone bill. But the real kicker here with parents paying for their kids, nearly half are helping pay for vacations. Vacations! A family vacay is one thing, but if your dad is working 60 hours a week in the salt mines while you're sipping on pina coladas in Jamaica on his dime, something ain't right here. I think I'm getting the black lung, Bob.

So when you add this all up, the average amount these parents give comes out to nearly $1,500 a month, which is almost 18 grand a year. That's potentially enough to buy a car, install an above-ground pool in your backyard, and rent a private island for a weekend. Now, it's easy to make jokes about this stuff, but like I mentioned at the beginning, this is a serious issue, both for the parents giving the money and for the adult children on the receiving end. And that's because of four main problems that we're going to cover today.

Problem number one, parents are wrecking their retirement. 50% of parents who financially support their adult kids say it's affecting their financial stability. Half. So it creates a big old mess, a la the science experiment your toddler conducted under their bed. And it gets even worse when you realize that a third of Americans already anticipate having to work beyond retirement age to make ends meet.

So let's see just how much these parents are missing out on by giving their kids $1,500 a month using our handy-dandy retirement calculator. So let's say this parent is 50 years old. And instead of giving their kid $1,500, they invested that money instead. So age 50. And let's ride this out to age 65 and say they have $0 in retirement right now. $1,500. Let's say an annual rate of return of 10% over that time. Calculate.

That's over $620,000. That's the missed savings opportunity because they're trying to help Junior out. You know how they tell you on airplanes to slap on your oxygen mask on before helping your kids? This is why. All right, parents are retiring broke because their kids don't have enough money. Which leads us to problem number two. Adult kids are delaying actual adulthood.

When you rely on your parents' money, it keeps you from becoming a full-fledged independent adult. And that's because maturity is earned, not inherited. You don't learn to budget when someone else pays your bills. You don't build confidence when someone else is always your backup plan. And you don't develop any grit when you're never uncomfortable.

On the other hand, something very real happens to you emotionally when you're out on your own and paying your own bills. Yes, it's hard, but that growth is where you become an adult. You learn how to show up and take responsibility. You got to learn how to hustle. You got to learn how to cover all of your bills and still have margin to do other things with your life. So the bottom line here is you can't grow into adulthood if you never have to act like a grown-up. So parents, stop enabling your kids, get them off the payroll,

teach them how to fish instead of handing them more fish problem number three it creates relationship tension the savings.com study also found that 77 percent of supportive parents attach conditions to their financial assistance these conditions range from maintaining a job or pursuing education to achieving predefined financial goals or contributing a specific amount to certain bills and this is the part that really makes my head spin right round right round

because the only thing this sort of arrangement creates is resentment. You quickly go from a loving parental relationship to some kind of weird unspoken business contract. And eventually it's going to create resentment and drama. The kind that makes Thanksgiving dinner feel like your first kiss. Awkward and uncomfortable and nothing like the pillow you practiced on. - That was more awkward than I anticipated.

And lastly, problem number four, it feels helpful, but it's actually harmful. When a parent constantly steps in to protect their kids from every discomfort or mistake, they're not helping, they're hurting. We call this snow plowing, right? You want to smooth it out so your kid has to experience no pain or suffering. But here's the thing, robbing someone of consequences and struggle usually winds up crippling them. And in most cases, it becomes a form of enabling and causes entitlement.

Bailing someone out every single month keeps them from ever learning how to swim. You just become a permanent Elmo floaty. Let me get real with the fellas for a second, all right? How do you think that girl you're texting is going to react when she finds out your mom still pays your car insurance? Now, don't at me here. Don't get mad at me. I'm just going off the science here. Listen to what author and professor Scott Galloway had to say on this subject. The most important thing, though, to women...

and people don't like to admit this, is the man's ability to signal future resources. It's not even he has to be rich now, but he has to have his act together such that he looks like he will be a decent provider.

And the number of people, the number of men we're producing that qualify in this category is shrinking as women get taller. It's the high heels effect. 50% of women say they won't date a man shorter than them. I bet it's 80%. They're just not as drawn to men who are smaller than them because it's very instinctual. I need someone who will protect my young. All right, I think I had enough. I like where he was going until he dogged on short kings. Just because I'm short doesn't mean I'm short.

I know that one might sting a little, but it's the truth. Listen, I'm not here to roast you or shame you. If you're getting help from your parents, this is not a public shaming. And same goes for parents watching this. If you're still covering your grown kid's rent, I'm not trying to guilt trip you. I know you love your kids and you just want to help. But we need a reality check here.

because as we've clearly seen, both of those behaviors cause a lot more harm than good. So let's talk through a plan to help anyone caught in this mess to cut the cord and move on. And it's gonna be uncomfortable.

But because it's going to be uncomfortable, let's talk about something comfortable first. And that's every single product that Cozy Earth has to offer. They're a sponsor of today's episode, and I love the products they're putting out there. From athleisure to bedding, they've got it all to help you beat the heat this summer. I love their sheets. I love their athleisure joggers. I love their shirts, their no-show socks. Everything about them is magnifique.

So check it out. Go to CozyEarth.com slash George and you'll get 40% off. You can use the promo code George at checkout to get the deal as well. I'll drop a link in the description to make it easy on you. And before we get back to this whole mess with parents giving their kids money, let me show you how to keep your hard-earned money from collecting dust in a traditional savings account with a crappy interest rate. And the way you do that is with online bank Laurel Road, another sponsor of today's episode.

You see, unlike most brick and mortar banks, Laurel Road's high yield savings account offers top tier APY that lets your money grow a whole lot faster. And I personally use them because they never charge any dumb monthly maintenance fees. Your deposits are FTSE insured and there's no minimum balance required to open an account. So what are you waiting for? It's time to upgrade your savings and make your money work harder for you. Go to laurelroad.com slash George or click the link in the description below.

All right, so what do we do about all this? Let's go to the solution here, and we're going to start with the parents. Here's what I recommend for you guys. First, develop an exit strategy. Now, you can do this with love, but you have to do it with an end date. Say something like, hey, we're going to help until January, and after that, we believe in you to figure it out. Remember, you're not abandoning your kid. You're empowering them. Next up,

Offer wisdom, not just money. Help them build a budget. Walk them through picking the right types of insurance. Help them hunt for a job. And finally, protect your future. If you're not investing for your own retirement, then you're not helping your kid. You're trading your future for theirs. And that's not a fair exchange. And it will cause you to be a financial burden to your kids down the road when they have to foot your retirement because you didn't prepare for it. Now, moving on to the kids. Here's your three-step path to gaining financial independence from your parents.

First, step up. Even if your parents don't have any problem with paying your bills, you need to be the one to get the ball rolling. They probably don't want to talk about it, so you take the lead. It just takes saying something simple like, hey, I want to start paying for my own phone. Can we talk about this? And then you'll be on the road to breaking free. And I promise you, they will be like, oh my goodness, what'd you do to our kid? This

This is amazing. We love this. Next, get on a plan. Start making a budget. Find a side hustle. Cancel your Boy's Life subscription already and stop making your parents pay for it. And I know it's changed his scout life, but we all know that name sucks. Boy's Life. Way better. Tough guy. Thinks he's a tough guy. I know you don't want to rob your parents of their dream retirement, and getting on a plan is a way to keep that from happening. Now finally, give back.

Don't just stop mooching off your parents, start showing them some gratitude too. Maybe cover dinner once in a while, call your mom more than once a year on her birthday, or at the very least, say thank you, and then get to work on becoming financially independent. And if you want some extra help breaking free from the cycle and finally getting on your own two feet, check out my audio book, Breaking Free From Broke. I will be your guide and your money mentor to help you all the way through this. I'll drop a link in the description if you wanna check it out.

And for a little extra encouragement, check out this video where I broke down the simple plan I used to go from broke to net worth millionaire in less than 10 years. Keep watching to check it out or click the link in the description. That's it for today. If you found this episode helpful, hit the like button, hit the subscribe button, and share with a friend who's still using their mom's Costco card, which is illegal, by the way. Thanks for watching. We'll see you next time.