According to a U.S. Bank survey, more than half, or 53%, of Gen X parents have concerns that their kids will require financial support well into adulthood. This figure stands in contrast to 37% of all parents. Gen X is facing unique challenges that intensify these worries.

Unraveling the Financial Woes of Gen X Parents and Their Kids

Financial Planning and Its Importance

Financial planning plays a crucial role in the lives of Gen X parents. It involves budgeting, expense tracking, and profit and loss analysis. Spreadsheet software becomes an essential tool in this process, helping them manage their finances effectively. With rising education, housing, and healthcare costs, having a well-thought-out financial plan is more important than ever. For example, Natalia Gdovskaia's photo captures a moment where financial planning is at the forefront. Adinah Caro-Greene, an employee benefits broker, has seen how these costs have created economic challenges for her Gen Z son and his peers. Part of her long-term financial goal is to fully pay off a rental property that he can inherit and potentially live in. "It's uniquely hard for kids now," she says. "Seeing how hard it is for my son's generation has motivated me to do what I can."

The "Sandwich" Generation Dilemma

Gen X is often referred to as the "sandwich" generation, facing the financial pressures of supporting both parents in retirement and kids as they come of age. Most Americans are dealing with runaway inflation following the pandemic, but Gen X parents are particularly focused on whether their kin will be able to make it without monetary aid. Tom Thiegs, family wealth coach at U.S. Bank's Ascent Private Capital Management, points out that Gen Xers have grown up in less-than-ideal economic conditions, witnessing four of the five largest stock market crashes in history. They were among the first to mainly use 401K plans for retirement instead of pensions. Now, they are questioning if Social Security and Medicare will be around long enough for them to benefit from the systems they supported throughout their adult lives. Thiegs says his clients are "worried" but not "paralyzed." They have been through economic downturns before and have a mindset of being ready to handle unexpected situations. "It's not just all doom and gloom for Gen X," he says. "There's also this understanding that we'll be able to figure it out."

The Bank of Mom and Dad

Caro-Greene notes that it's common among parents she knows to give money to their young-adult children, especially in the high-cost San Francisco area. A Savings.com survey found that parents offering financial support to their kids are shelling out an average of $1,384 per month. For Gen Z offspring, this figure jumps to $1,515. Marguerita Cheng, a mother and certified financial planner, says there's a question of how long and to what extent parents should be footing the bills for their kids into adulthood. "I would never tell you not to help your child," she says. "But it's important to have boundaries or limitations to giving." Cheng advises parents to avoid depleting their savings and struggling in retirement while helping their children. She also suggests removing the stigma around discussing money and decisions like living at home after college. For those with the means to help, clear guidelines can be useful, such as setting a cap on how much money to give or distributing funds incrementally over a predetermined timeframe. Given Gen X's experiences, Thiegs finds that this generation thinks differently about their dollars and how to use them, including considering their children and other family members in the equation. "They've broadened into a more holistic view of money," he says. "It's not just balancing your checkbook, but also understanding what, long term, do I want for my life."