When our kids were young adults, the Bank of Mom and Pop was often there to help out, to be a cushion for an unexpected expense, to defray education costs. Even when the grown kids started families, We the Bank was a generous lender--for child care costs or a downpayment on a house.
We were not alone. According to a 2,000-person survey by TD Ameritrade, on average grown kids ages 19 to 37 received more than $11,000 in financial support and unpaid labor (babysitting, household help) from their boomer parents, ages 50 to 70.
A managing director of TDAmeritrade tells us that the underlying driver of our children's financial needs are student debt, stagnant wages and rising childcare costs.
Then he adds a kicker: "Grandparents are the secret to making it work — eager to help with financial support, child care and running the household."
He made that comment because half of the grandparents surveyed said they've made sacrifices to help their children and grandchildren. All of which suggests that we may think adulthood has brought our children financial independence, but we need to rethink that. For many of us, the Bank of Mom and Pop is never closed.
If you're interested in exactly where the money (and free labor) goes, rent/mortgage tops the list in terms of dollars received, followed by car payments, groceries, utilities and cellphone bills. Almost 20 percent of the kids surveyed said their parents helped pay their phone bills to the tune of somewhere between $262 (the average of what kids said they received) and $547 (the average of what parents said they sent.)
Also on the grandparent help-list: toys and clothing for grandkids as well as grandkid schooling.
Is there a price to pay for being a 24/7 banker? You bet. A GOBankingRates' savings survey looked at the price parents and grandparents are paying for their helping hand. Boomers ages 55 to 64 owe a median of $3,000 in credit card debt and two-thirds of them have less than $1,000 in a savings account.
