Feb 28, 2026
Adulting is a lot more expensive these days. So it’s not surprising that many millennials are turning to the Bank of Mom and Dad for help.
Jeff, a retired dad from Minneapolis, called into The Ramsey Show for advice on whether he should keep financially supporting his 43-year-old daughter, who got divorced about a year ago. She got the house in the divorce — and was saddled with a mortgage she couldn’t afford. So Jeff helped her refinance by co-signing the mortgage.
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“She can’t afford the payments right now,” Jeff said, adding that his daughter is going to school and working part-time while raising his two grandkids.
While his daughter pitches in what she can, Jeff — who has a net worth of about $500,000 — can’t really afford to keep helping with the $1,700/month mortgage payments, either. And it’s an open-ended arrangement.
“You are a phenomenal dad. But this isn’t your burden,” co-host Ken Coleman told Jeff.
“Once she gets used to you floating two grand a month, why would she go, ‘I don’t want to take that anymore,’” added co-host George Kamel. Maybe she’ll eventually get on her feet, but that could be “years and years from now” (1).
“We need to face reality here,” he said.
Here’s why being a “phenomenal dad” can financially backfire.
More parents are bankrolling their adult children
Jeff is far from alone: More parents are financially supporting their adult children these days amid the high cost of living, especially for housing.
Nearly three-quarters of parents provide some form of financial assistance to children over 18, according to a 2025 survey from AARP. On average, they spend about $7,000 annually on this support.
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But this comes at a cost, in more ways than one: 42% of parents report financial stress due to supporting adult children, 35% experience emotional stress, and 9% have chosen to retire early due to the demands of helping adult children (2).
About 59% of men and 56% of women 18 to 24 still live at home, according to U.S. Census Bureau data, while among 25-34 year olds, 19% of men and 14% of women do (3). This can increase the household budget for groceries, utilities and insurance.
While parents may want to help their adult children, as Jeff does, it can also put their retirement security at risk and potentially delay their children from making necessary financial changes.
For example, since Jeff co-signed his daughter’s mortgage, he’s on the hook for those payments if his daughter can’t make them.
A 2025 survey from Savings.com found that 62% of parents said they lived a more frugal lifestyle for the sake of their adult children, and 40% said they felt pressured to do so, even if it meant stretching their own financial resources beyond comfort.
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“The psychological and fiscal impact of such commitment translates directly to parental anxiety,” writes Beth Klongpayabal, Savings.com’s analytics manager. “At a time when many Americans haven’t set aside enough funds for their later years, 79% of those supporting adult children worry about setting themselves up for a comfortable retirement.”
Indeed, working parents contribute twice as much money to their adult children than they do to their retirement accounts each month, according to Savings.com.
With under 20% of parents telling Savings.com that support could continue indefinitely (4), that’s likely to strain their finances and whittle down their nest egg — as in Jeff’s case, where his retirement savings are taking a hit while he supports his adult daughter.
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Setting financial boundaries
Financial help without boundaries can harm both generations. In some cases, being a “phenomenal parent” may mean stepping back — even when it feels uncomfortable — so adult children are forced to regain their financial independence.
You should set aside money for your own retirement first, Carolyn McClanahan, a certified financial planner and founder of Life Planning Partners in Jacksonville, Fla., told CNBC. “We are careful to make sure parents don’t gift so much to put themselves in peril,” she said (5).
If you’re going to help, it should be temporary, intentional, and conditional with clear boundaries, Kamel told Jeff on the show. For example, you could give money for six months and, after that, they’re on their own.
“And that’s not callous,” Kamel said. “That’s actually good for her, because she’s a grown woman and she needs to live her own life and not be propped up by mom and dad” (1).
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“You want this to be a safety net, not a hammock,” he said.
What starts out as helping can very quickly turn into enabling. “This perpetuates a cycle of dependency, strain/conflict and resentment,” writes Jeffrey Bernstein, a child, adolescent and family psychologist, in Psychology Today.
Setting boundaries can help an adult child “have better financial and mental health,” he wrote. “This is not about punishment. Instead, boundaries are guideposts, not walls” (6).
For example, Jeff could set a cut-off date for his daughter’s financial support. She could then sell the house so she’d have a decent down payment for a smaller, more affordable home. Or, she could rent for a year or two until she finishes school and starts earning a better salary.
As for Jeff’s grandkids? “The kids are going to be fine,” Coleman said. “It’s not the house they need. They need her” (1).
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Ramsey Show Highlights (1); AARP (2); U.S. Census Bureau (3); Savings.com (4); CNBC (5); Psychology Today (6)
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Vawn Himmelsbach is a veteran journalist who has been covering tech, business, finance and travel for the past three decades. Her work has been featured in publications such as The Globe and Mail, Toronto Star, National Post, Metro News, Canadian Geographic, Zoomer, CAA Magazine, Travelweek, Explore Magazine, Flare and Consumer Reports, to name a few.
