The Cost Of Supporting Adult Children And Aging Parents

Family members do not have to be legal dependents to be financial burdens.

Likewise, major life changes seem to occur cyclically within family units. Children age and hit new stages of independence; parents age and hit new stages of dependence.

Facing the generational changes of growing up and growing old is not uncommon in close-knit families, but the usual-ness of it does not always prepare the middle generation for the hardships it can cause.

Being in the middle of two generations in financial need of support, albeit one gaining independence and the other potentially losing it, can result in even more financial strain. While this conclusion may appear obvious, the debt accrued by those taking care of their children and their parents is nationally significant. Supporting others immediate needs often leaves the supporter with empty pockets and dipped into savings.

Yearly Support

A recent TD Ameritrade Holding Corp AMTD Financial Support Survey found that in addition to causing delays in major life milestones for supporters, the average American family financial supporter provided $12,000 over the last year.

This amount totals to approximately $630 billion from the U.S. economy in support.

Related Link: When Your Parents' Financial Health Becomes Your Concern

Additionally, the supporter demographic is no small percentage of Americans. The study found that one fifth of Americans fit this categorization, with 25 percent of Boomers, 19 percent of Gen Xers and 20 percent of Millennials supporting other generations. While the average support was found to be $12,000, the support provided by the Millennial quarter far surpassed the average, coming in at $18,000.

Support Isn't Always A Positive Thing

"Support" is associated with providing, caring, protecting and being compassionate; however, being a financial supporter is not always a good role to take on.

In some situations, it is a feasible and temporary solution, but the risks must be weighed with the financial security of the giver. The same study found that, on average, financial supporters carry $100,000 in debt, from mortgage debt (on average $75,000) to personal loans to credit card balances (on average $22,000).

It's A Generational Thing

Furthermore, the commonly held perspective on support has been found to differ between generations, with a substantial portion of Generation Xers feeling that their financial responsibilities outweigh their parents' generation's responsibilities. A whopping 39 percent likewise feel that the financial security their parents' generation enjoys is or will be unattainable for them.

However, the study found that "financial supporters [across all demographics] believe that no other generation has more financial responsibility than they do, and rate other generations' saving and investing skills as very poor," with nine out of 10 believing their burden is equal to or greater than their immediate preceding or following generations.

Related Link: Millennials And Financial Phobias: Is There A Happy Ending Ahead?

What Can Be Done?

Regardless of whether you currently provide or receive support, the reality of the situation is common among Americans. Financial burdens are frequently shared by those who have come before you or after you; monetary decisions and their implications do not limit themselves to those who make the choices.

It is important to recognize the repercussions your financial decisions could have, not only for you, but for your parents and children. Understand that financial security is a serious, inter-generational reality. Take the time today to talk with your family members about budgeting, debt and future expectations. Being a financial supporter, or receiving financial support, does not have to be a death sentence for your savings; plan for tomorrow by talking today.