Saving for Adult Kids—Smart or Costly?
As both a financial advisor and a parent, I’m seeing a significant shift in how American families are planning for their children’s futures. Parents are not just saving for college, but earmarking serious money to help their kids well into adulthood. What’s motivating all this? The economic math simply doesn’t add up like it used to. While Americans’ inflation-adjusted incomes are only 18% higher than back in 1980, the cost of living—especially for housing, medical care, tuition, and child care—has soared, in some cases multiplying many times over. LendingTree’s latest data puts the cost of raising a child to 18 at nearly $300,000, and that’s not counting the sharp uptick in costs over just the last couple of years.
It’s no wonder parents feel pulled to help their adult children get established. In fact, supporting grown kids is becoming so common that about half of all parents with adult children now provide regular financial assistance, averaging $1,474 a month. Some parents are even contributing more to their kids than to their own retirement accounts.
When the Moneywise team reached out for expert commentary, I shared what I see every day: “Parents are more permissive now and more likely to provide, but I also think the need is greater. I think parents see that and say, ‘I have the ability to help out.’” The reality is that families face a tough choice between letting their kids struggle—or proactively saving and planning to ease that transition into adulthood. Many parents, understandably, want to give their children the best shot at success in an expensive world. But here’s my professional caveat: Generosity is admirable, but not if it undermines your own financial health. The best gift any parent can give is the freedom to not become a burden themselves later on. In my view, helping your kids launch is neither good nor bad—it just has to be done intentionally, with your own long-term plan front and center. Support is a privilege, not an obligation, and the best outcomes happen when families talk openly about expectations and limitations before the need arises.