What to know
- Fifty-one per cent of Canadian parents surveyed said they financially supported their adult children in the past year, providing an average of $6,000.
- Groceries were the most common expense, with 56 per cent of parents who provided support helping with food, followed by emergency expenses, rent and utilities.
- Thirty-two per cent of parents said their children aged 18 to 40 are not yet financially independent, according to the survey.
- Some parents are still providing support well into their children’s 30s, with 21 per cent reporting supporting children aged 30 to 34, while 19 per cent supported those aged 35 to 40.
- One expert points to the cost of living and difficult job market as factors, while also warning parents to consider their own finances before providing ongoing support.
As the cost of living remains a pressure point for many Canadians, a recent survey found that more than half of Canadian parents have financially helped their adult children in the past year, including those into their late 30s.
The RBC survey published on Tuesday revealed that financial independence is becoming rarer among Canadian adults, as many parents continue to support their children way into adulthood.
According to the study, 51 per cent of parent respondents said they’ve provided financial support to their adult children in the last year. Parents said they’ve provided an average of $6,000 in support, while 18 per cent said they gave about $10,000 to $19,999 in support.
Why parents are helping their children
Among these respondents, 56 per cent said they helped pay for groceries, 43 per cent for emergency expenses, 24 per cent for rent, 21 per cent contributed to utilities, and 12 per cent helped with credit card or debt payments.
Responses indicated that parents have been supporting children for a variety of reasons, including the current economic reality.
More than half of those who provide support view it as part of their roles as parents, while 35 per cent said the high cost of living is unmanageable for their children.
Meanwhile 25 per cent said they wish to help their children have better opportunities than they had at their age, and 15 per cent said their adult children don’t have the money management skills to be financially independent.
Some adults needing support into their late 30s
While financial support was more common for parents of younger adults, the study also revealed that some are still supporting their children way beyond their 20s.
Among respondents, 32 per cent said their 18 to 40 year-old children are still not financially independent. Sixty-eight per cent of the parents that still support their children, said they are aged between 18 and 24 years old.
Although support is less common as they get older, it still appears to be present, as 21 per cent said they support their children aged 30 to 34 years old, and 19 per cent for those between 35 and 40 years old.
The kind of support also appears to change as children age, with 24 per cent of parents supporting those between 18 and 24 years old helping to pay for rent compared to 30 per cent for those aged 30 to 34. Meanwhile, 43 per cent said they help their 35 to 40-year-old children pay for groceries.
Results could reflect cost of living
Clay Jarvis, a financial expert at NerdWallet Canada, tells Now Toronto that the survey results did not surprise him.
With youth unemployment reaching 12.9 per cent in August and cost of living continuing to make headlines, the expert said it’s not unexpected that adults are more dependent on their parents’ financial help.
“We also know that we have a lot of multi generational families in Canada where it’s not unusual for kids to stay at home until they’re well into their 30s. So I think considering how expensive things are and how tough the job market is, I don’t think it’s surprising at all,” he said.
However, whether this support is beneficial for adults or holds them back depends on the kind of assistance their parents provide.
According to the expert, if adults are facing emergency situations or overall inability to afford the basics, parental financial support can help them overcome difficulties. On the other hand, continuing to provide financial support to adults who don’t know how to manage their finances can in turn set them back.
“If it is because they’ve had an emergency and all of a sudden they need an infusion of cash that they just don’t have access to, well, that’s fine. I mean, what are you going to do about that?” Jarvis said.
“If it’s just because they haven’t learned better spending habits or they’re misusing their credit cards, then simply forking over some money and letting them pay off their debts is not really teaching them anything.”
In those cases, the expert recommends parents have a thorough conversation with their children to understand why they might need support, and combine this support with financial advice when needed.
In addition, Jarvis said parents should also be mindful of their own financial situation before offering support.
“Your first instinct is going to be to help, you don’t want your kids to be in distress, but you also don’t want to strengthen behaviours or habits that they have that are leading them to have financial difficulties,” he said.
“You can get your children through a rough patch, but if that’s going to leave a $10,000 or $20,000 hole in your retirement savings, that could impact you negatively down the road. And who knows? Maybe your kids will never be in a position where they can return the favour.”
Torontonians weigh in
Speaking with Now Toronto, some city residents said they were not surprised to know that Canadians are financially relying on their parents beyond their 30s.
Citing a high cost of living, especially in major cities, some said that affording everyday needs like housing and groceries has become challenging for young people, which might be a reason for many relying on their parents for support.
“A lot of people talk about just rent, but it’s groceries, it’s rent, and it’s the fact that there’s a disproportionate increase in rent and home ownership prices versus when our parents’ generation were growing up. So even if you’re making a decent salary nowadays… it’s really hard to make payments,” Simone Mcfee said.
“Housing is the number one thing that is limiting people from being independent… Honestly, it doesn’t shock me at all. I think if you ask anyone my age, nobody would be shocked by that,” Abby Mcfee added.
Another resident, Martin Watson, said he actually expected the number of financially dependent adults to be higher. According to him, the concept of financial independence itself has also seemed to change over the years, as some expected financial milestones are no longer a possibility for younger Canadians.
“Homeownership used to be the goal. I don’t know [if] most people in that age group even see that as a possibility. So financial independence, defined as being able to own a home, is completely out of reach for most people,” he said.
Growing up in an immigrant household, Watson also explained that in many cultures living at home or sharing financial responsibilities with parents is common for many.
“I think [moving out] is something that was developed in North America because of this privileged position, where for a while everybody could move out and could afford it. As that has stopped being a financial reality,” he added.
