Spoiler alert: Kids are expensive. From the time they're evicted from the womb through college, parents are working hard to provide for their families in the best ways they can. If you've read any stories about how more and more people are choosing to live with mom and dad well into adulthood, you know that the buck doesn't stop when they graduate from a university or snag their first full-time job. As it turns out, parents nationwide are continuing to support their offspring well into their lives.
A recent survey by Merrill Lynch and Age Wave revealed something pretty darn shocking -- parents spend an overwhelming $500 billion annually on their adult children. Let that figure soak in before we get to the really depressing part.
While moms and dads are providing this financial support for their grownup kids, they're sadly only putting away about $250 million into their own retirement. That's a pretty low figure considering we'd all like to live a while and enjoy the fruits of our labor.
Another interesting statistic from the study, 90 percent of parents surveyed were surprised by how much more money they spent after having kids. Diapers don't pay for themselves (although if you've found a way to make that work, please share!) and other incidentals add up quickly. From healthcare to purchasing birthday party gifts for your child's active social schedule, there are both obvious and hidden costs to raising a family.
Going back to that $500 billion figure, where exactly is that money going to adult children? Sixty percent of parents interviewed for the survey said they have contributed to their child's wedding, an age-old tradition but certainly not an uncommon one to continue in the modern era. But a whopping 54% also admitted to paying for their grown kid's phone expenses (or at least part of the bill). If that's the case, everyone should be calling their parents on the regular for a catchup without complaint.
Parents aren't turning a blind eye to these financial issues, in fact, 72 percent said they wished they had a reachable expert to help teach their kids about investments. From the sounds of this survey, everyone could use a lesson in financial literacy and saving for a rainy day.