Still Footing the Bills : Finances: Many parents are helping out their adult children with more than the occasional loan. But it’s often as hard to ask for money as it is to give.
Cheryl Wilmer thought she had achieved “adult” status.
The 31-year-old clothing designer had been supporting herself for more than six years. She has her own car, her own VCR, her own portable phone.
Recently, however, because of budget cuts at the company where she works, and added personal expenses, she has been forced to ask her father, for financial help--about $400 a month.
“It’s a Catch-22,” she says. “I think, ‘A father is a father. Isn’t he supposed to help me?’ But then I think, ‘At this point, aren’t I supposed to take care of myself?’ ”
Kids--even grown ones--turning to parents for financial aid is nothing new. But thanks to the recession of the ‘90s and bloated expectations left over from the ‘80s, more young adults of middle-class backgrounds are turning to their parents for more than just the occasional loan.
“There is a growing number of kids who are coming back and depending on their parents, and needing subsidies because of a higher cost and standard of living,” says Stuart Fischoff, a Beverly Hills psychologist and professor of psychology at Cal State L.A. “I’m seeing a lot of it now, with students, patients and friends in my peer group.”
More than half of those polled in a recent survey conducted by Purdue University said they had given a loan of $200 or more to a friend or family member. The majority of those loans had been to a grown child.
“Families have always lent money,” says Dixie Johnson, the associate professor of family economics at Purdue who conducted the poll. “But the pay-back problem is probably exacerbated with the economy. It’s cyclical. As the economy gets worse, people borrow more, lose their jobs and have a tougher time paying back.”
One-third of the lenders in Johnson’s poll said they had never been paid back, and 25% said they were strapped for money because of lending. Forty-one percent said they would not recommend lending money to family members.
But Wilmer’s father, John Wilmer, 56, who owns an employment agency, says he is happy to help his grown children--and indeed, he helps three out of four. He virtually supports his 27-year-old musician son.
“I don’t mind doing it, though sometimes I get resentful,” he says. “I don’t feel bad unless they take advantage. As long as I know they’re working, I don’t mind giving.”
But his daughter doesn’t like asking. “I feel guilty,” says Wilmer, who lives in West Los Angeles. “I think maybe somehow I could come up with (the money) myself. He doesn’t owe it to me. It makes me feel like a child again, and it undermines my sense of reliance. I lose the feeling of strength, of knowing I can take care of myself.” Still, Wilmer says she’d rather get help from her father than make substantial lifestyle adjustments.
Experts say many young people are unwilling to give up certain standards of living they grew up with.
“People in their 20s grew up with a cultural expectation that they have to have separate living dwellings, a dishwasher, fancy everything,” says Meg Pond, co-director of the National Shared Housing Resource Center, a nonprofit organization that assists housing groups throughout the nation.
“The affluence of the ‘80s brought a sense of spoiling and entitlement,” says Fischoff, who specializes in family and popular culture. “Before, if kids couldn’t afford to live alone, they got roommates. Now kids don’t want roommates. Kids of the ‘80s are less enterprising, less self-sufficient and less embarrassed about being not self-sufficient.”
Then, Fischoff says, there are the parents who gave their children material goods in place of emotional involvement.
Some of those who constantly take money from mom and dad say they do suffer, and find themselves less able to feel independent or to even trust their own judgments.
Thirty-one-year-old Julie Garfinkle has been supported by her parents sporadically for the past 10 years, and feels it has affected her negatively.
“I don’t feel like a member of society,” says the West Los Angeles secretary, who this time around has been out of work for almost a year. “When you have to be taken care of financially, it affects everything you do.”
And giving generally has strings attached, psychologists say, despite protestations to the contrary.
“Often, if a parent reinstitutes a financial life-support system, they ask for something in return,” Fischoff says. “They impose their standards on the child. They get back into the parent/child mode, and it invariably doesn’t work.”
Many young people readily accept financial help from their parents during college, assuming that upon graduation they will be financially independent. But they often find that entry-level salaries don’t cover the cost of rent, a car payment and other staples.
While the average California entry-level salary in accounting is $27,500, and the average entry-level chemical engineer makes $39,000, a starting restaurant or hotel manager’s salary averages $19,300, and a starting teacher can make as little as $10,000, according to a College Placement Council salary survey.
But the average Los Angeles household, according to a 1988-89 survey by the U.S. Department of Labor, spends $33,482 a year--including about $7,000 for rent and almost $6,000 for transportation.
The widening gulf between living expenses and salaries has forced graduates to not only borrow money from parents to get by, but also to make greater compromises in the kind of job they want and often to leave Los Angeles, says Cathy Behrens, an academic counselor at UCLA for 11 years.
Jerry Houser, director of Career Development at USC, agrees.
“A lot of students and alumni are relocating,” he says. “It’s too expensive here, and they can’t afford to live.”
It used to be that some students would “do Europe,” or take a break during the summer after graduation, but now they can’t afford to, Behrens says. Some even leave school before commencement, at an employers’ demand.
“Employers are making ultimatums, taking the students’ welfare less in mind,” she says. “And students need the money, and they are fearful, so they are doing what they have to do.”
Psychologists are quick to point out that not all financial help is inappropriate, and that the occasional loan is different from chronic giving. Interdependence is part of the human condition, and if help is given when needed and when affordable, it’s certainly not a bad thing.
But problems arise when well-meaning parents reach into their own savings or retirement money, or even put themselves into debt in an effort to keep their kids afloat. Some parents bankrupt themselves to help their children.
“We’re in an economic mess, and people are getting into trouble and going to their parents for help,” says Richard Pittman of Consumer Credit Counseling Services of Los Angeles, a nationwide, nonprofit agency.
“Parents max their credit cards for their kids, and they get into real trouble,” says Pittman, who recently saw an older couple who had $40,000 in credit card debts because they had lent $40,000 to their child.
“By the time (parents) come in here, there is not a lot of money left. They have no more to give. Still, what little they can give, some will squeeze out to their children to their own detriment,” he says.
One Beverly Hills woman, president of her own business, fully supports her 32-year-old daughter, who went back to school, and employs her 36-year-old son. Though she is not strapped for money, she admits what she gives to them would have been put toward her retirement. She looks at the support as an investment.
“In earlier days it was hard to say no, because you don’t want to lose favor with your kids,” she says. “But I won’t give beyond my means, and I like being able to help my children. I have faith someone will be there for me.”
