In early August, Camille DeMere, 22, got a call from her mum.
The roof of their Greenville, S.C. home had been damaged by a bad storm and the insurance company wouldn’t front the $4,000 they needed to repair it.
Would she be able to loan them the money?
“My parents know that I’m pretty good with savings because when I moved to New York, my mother told me I was supposed to have at least $7,000 (in an emergency savings account) at all times,” DeMere said. “They weren’t asking for a loan so they could go to Tahiti for a month. They’ve put down a lot of money for me, so it was the least I could do.”
Her father, who works as a freelancer, hasn’t scored as many writing jobs lately and her mother, a physical therapist, has been working to fill in the gap in their income.
They’ve always been fiscally responsible, she said, but like many middle-class Americans feeling the squeeze of a battered economy, all it takes is one nasty curveball—like a natural disaster or job layoff — to send their finances tumbling.
Millennials have garnered a reputation lately as an added strain on middle-class families’ income, as millions have moved home after striking out in the dismal post-college job market.
A recent study found 59% of parents were supporting their children after college with things like housing (50%) and insurance coverage (35%).
There is still a minority of Gen Yers, however, like DeMere, who have managed to find financial success and start building their nest egg–just in time to help out their cash-strapped mums and dads back home.
80 per cent of young adults living at home in 2010 contributed to household costs, such as purchasing groceries, according to a study by Luminosity Marketing.
“I’m a young, single person with no responsibilities. I don’t even have a cat,” DeMere said. “I’m OK as far as money goes, so I think it’s better to give it to (my family).”
Like DeMere, Fayetteville, Ga.-native Baron Brown has fared far better than some of his peers in the business world. The 25-year-old makes a healthy living as an account manager at an advertising firm.
He lives alone and carefully budgets his income each month to keep his emergency savings account healthy. But he’s been tapping the account more for his father’s emergency needs these days than his own.
In October, his dad, a UPS truck driver, texted him to ask for a $600 loan to pay his cell phone and car insurance bill. There was one condition: Brown wasn’t allowed to tell his mother.
“They took a financial management course last year and although she told me she found it useful, I think it would alarm her that my dad didn’t really pick up any new skills,” Brown said.
His father has asked for small loans before but always pays him back in good time, Brown said. DeMere’s been waiting four months and still hasn’t seen the $4,000 she loaned her family, although she said she chooses not to bring it up too often.
“I think we’re all responsible for the welfare of the ones we love,” Brown said. “But (my dad) is older than me, so sometimes it really bothers me to know that my 50-plus year old father is still cash-strapped from time to time.”
The psychological effect on younger generations watching their parents struggle in today’s economy has yet to be closely examined, but the hope is that young adults will learn from the mistakes of their elders. Brown, at least, said he’s working hard not to repeat the cycle.
“I think it’s been a really important wake-up call to me,” he said. “It serves as a reminder that we can’t just expect things to work themselves out as we get older. We have to be proactive in effecting the outcomes we want in life.”
Struggling to get your finances on track? Click here to read how one writer made it happen >
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