April 20, 2006
The Bank of Mom and Dad
By ANNA BAHNEY
AT 23, Jason McGuinness lives a postcollege life in Manhattan that is very nearly typical. He works as a media research analyst, making about $30,000 a year. Sharing a two-bedroom apartment on the fourth floor of a walk-up building with a roommate on the Upper East Side, his portion of the rent is $1,100 monthly.
The walls are decorated with pennants and posters from Syracuse University, his alma mater. He orders takeout dinners, carries peanut-butter sandwiches to work and occasionally takes in a Mets game with friends.
And like many of his peers — educated, employed, urban-dwelling young adults — he receives monthly assistance from his parents, in the form of a $300 check and the payment of his cellphone bill.
This is not the largesse of wealthy families doled out through trust funds. Nor is the money a couple of $20 bills tucked into a card at the holidays. Mr. McGuinness and others like him are the beneficiaries of an increasingly common subsidy arriving regularly from Mom and Dad, something like a family fellowship.
It helps to pay for housing, bills and travel expenses, and the support has been increasing for the past two decades as education is extended, marriage is delayed and young people take the scenic route from adolescence to adulthood.
"Everybody I know is supporting their children in some way," said Gail Horowitz, Mr. McGuinness's mother, a vice president of the Zlokower Company, a public relations firm in Manhattan. Unlike young adults who "boomerang" back home to live with their parents — the subject of the recent comedy "Failure to Launch" — these young people live independently. But they need help to make ends meet, or put another way, to maintain a middle-class way of life.
The bottom line is that the assumption that financial obligations to children ended after graduation from high school or college is going the way of the pay phone. Today, parents are finding that they are on the hook for more, sometimes much more — contributions of thousands of dollars a year to help young men and women get on their feet economically, often into their 30's.
The economic dilemmas facing young adults were chronicled in two recent books: "Generation Debt" by Anya Kamenetz and "Strapped: Why America's 20- and 30-Somethings Can't Get Ahead," by Tamara Draut. Both explore how paychecks have stalled, housing costs have risen, education costs have skyrocketed and credit has become so available as to be dangerous.
Ms. Draut, the director of the economic opportunity program at Demos, a New York think tank, said students now leave college with an average of $20,000 in loans, which "added to these flat-lined paychecks and high costs of living, tips people over the edge."
While economic stresses may be exacerbated in cities like New York, people in other areas of the country are feeling the pressures as well. Nationally, 34 percent of those between 18 and 34 receive cash from their parents annually, according to a study by the Institute of Social Research at the University of Michigan published in "On the Frontier of Adulthood" in 2005. Cash is only part of the picture; parents also make generous presents of clothes, cars and help with down payments.
"We have not seen any signs of it decreasing," said Bob Schoeni, an associate professor of economics and public policy at the University of Michigan, who is an author of the study. "Certainly over the last couple of decades it has been increasing."
Middle-income parents earning less than $72,600 a year can expect to spend $190,980 on a child through age 17, according to 2005 government statistics. But Dr. Schoeni said that parents can plan on paying almost 25 percent of that amount again over the next 17 years, or $42,280 in 2005 dollars. This sum includes higher education but also much more.
Parents pay $2,323 a year to help support children 25 and 26 years old, said Dr. Schoeni, and $1,556 annually for offspring 33 and 34. (All amounts are in 2001 dollars and reflect support to children living both independently and at home.)
Nearly half of children between 18 and 34 also receive aid in the form of their parents' time — driving them home to the city after a visit, doing laundry, taking care of grandchildren — that has financial value. Time assistance from parents averages about 367 hours a year, or nine weeks of full-time work.
Although some may argue that the willingness of parents to subsidize adult children is prolonging their coming of age, Dr. Schoeni said his study suggests that extended education, the exploration of career options and delayed marriage are the causes of the long transition to self-sufficiency. Parental support "is not the driver of a delayed transition, it is a response to it," he said.
Other experts say that young adults with material support from families make a smoother transition into adulthood than those struggling entirely on their own.
"It may mean that they don't have to take the first job available," said Jeffrey Jensen Arnett, a developmental psychologist and the author of "Emerging Adulthood: The Winding Road from the Late Teens Through the Twenties."
Parental support allows adult children to explore careers with low earning potential, to make career shifts or to maintain a quality of life.
"So many of the things that I'm able to focus on now are great career-wise, but they are not monetarily rewarding," said Daisy Press, a singer who performs classical and avant-garde music. At 27, Ms. Press has just completed eight years of college, four at Sarah Lawrence and four more at the Manhattan School of Music. "I wouldn't be able to do this without them," she said.
That would be her parents, Reinhold and Linda Press, who are also musicians. As a bassist and singer, respectively, they have toured with Neil Diamond for the past 30 years. In addition to paying for her education, they bought her a one-bedroom apartment on the Upper West Side and are supplementing the income she receives from teaching music history part time.
Mr. and Mrs. Press said they believe their daughter's energy and thoughts should be on her education, and now that she is pursuing a music career they want her to have the best chance possible in an unforgiving field. "What if she had to stop and spend her days at Starbucks?" said Mr. Press, who lives with his wife in Laguna Niguel, Calif.
Mrs. Press is careful to say the money is not endless; she is 57 and her husband is 68. "It is the hard work and the passion that makes us want to help Daisy," she said. "She's not a lazy slug with no direction. She keeps moving forward."
Like other young people in her position, she has mixed feelings about accepting money from her parents. "I think the down side, if I can even say there is a down side, is not necessarily feeling like an adult," Ms. Press said. "There is a part of me that feels like I'm 19 or 20. I don't have the emotional experience of knowing what I cost and earning what I spend. I can only imagine what it may feel like."
Alanna Lopez, 27, knows very well the value of money. After leaving college before graduating and returning to Manhattan to be with the man who is now her husband, Benjamin Lopez, she began working in hotel management. Then 14 months ago, she had a baby, Abigail.
"Customer service was draining," Mrs. Lopez said. "I would be getting home very late. It was going to be 5, 6 or 10 more years until I had a major promotion."
She decided to quit and study art history and education at Hunter College. But losing her income put the self-sufficiency she and her husband, a hospital receptionist, had achieved in peril. Her mother, Suzanne McGrattan, came to the rescue.
"She is paying for my education and a monthly stipend to cover my portion of the bills," Mrs. Lopez said. She'll also watch Abigail and she recently renovated the couple's kitchen and helped to furnish the apartment. "I'm thrilled she's going back to school," Ms. McGrattan, a lawyer, said. "She saw she didn't have a life. She wants to spend more time with the child."
Dr. Arnett, the psychologist, said young people are ambivalent about receiving money because it represents parental power. Most young people, he said, are striving for independence, to feel they have reached adulthood.
"But they are also generally quite ambivalent about adulthood, in general," Dr. Arnett added. "You feel grown up. You have more status, more position. But it is annoying, too. You have to pay your own bills, and take on all these responsibilities."
While some parents earmark contributions for food and rent, others expect their children to take care of the basics while they pick up special expenses like a vacation.
"I'm enjoying watching them spend their inheritance," Judy Maysles, a real estate agent in Manhattan, said about the support she provides to two grown children, John, 30, who works with a hedge fund in New Jersey, and Celia, 27, a filmmaker. "I'd rather spend it now and watch them and enjoy it with them. I think that a lot of my generation feel that way."
She bought her daughter appliances for a house in Portland, Ore. Now the proceeds from selling that property are enabling Celia Maysles to make a documentary about her late father, the documentary filmmaker David Maysles.
Eventually, most children outgrow the need for a stipend. But the instinct of parents to give — and of children to receive — can linger on. When John Maysles got a dog four years ago, his mother told him he couldn't leave it alone all day.
"So I pay for doggy day care," she said. "It is $16 a day. Probably he could afford it, but it has been on my credit card and I haven't changed it."