Finder Bank of Mum and Dad Report 2021

Australian adults are living their lives with a helping hand from Mum and Dad. A nationally representative Finder survey of 1,003 adults asked 444 parents with children over 18 about the financial support they provide to their adult kids.

What is the "Bank of Mum and Dad"?

Most adult kids leave the coop eventually, but for many, financial support from their parents continues to come in. Finder research shows that more than half (52%) of Australian parents help out their adult offspring with expenses.

How much are parents contributing?

According to Finder's research, almost 1 in 2 Aussie parents (47%) pay for their adult children's groceries.

Around 35% allow their adult children to live at home rent-free, while 16% charge board or low rent. A further 32% cover their adult children's bills, while 1 in 5 (22%) provide free childcare for their grandchildren.

That same number (22%) fork out for their child's car-related costs like registration fees and petrol, while 10% pay for or subsidise tertiary education. Travelling isn't off the cards either, with 18% of parents paying for some or all of their adult children's holiday costs.

Which state is home to Australia's most generous parents?

New South Wales has the highest proportion of parents who support their adult kids financially, with over half opening their wallet (61%). This is followed by Victoria, where more than 1 in 2 parents (55%) help out their kids with money.

But adult kids in Western Australia might feel they are on their own by comparison. In WA, just 39% of parents provide financial assistance, but keep in mind that this still accounts for almost 2 in 5 parents.

Parents are also mortgage lenders

As Australian property prices surge, many young Australians fear that without a lending hand from their parents, they will never be able to save enough money to buy a home.

Finder analysed ABS and CoreLogic data for property prices and incomes in each of Australia's capital cities to determine where saving for a home is the most challenging, and unsurprisingly, Sydney was the most expensive.

On average, Sydneysiders will need to spend 8.2 years saving for a home deposit. Melbourne came in second place, with an average time to save a deposit of 7.3 years, followed by Hobart (6.4 years). Darwin came in last place, with residents needing to spend only 3.5 years saving - less than half the time it takes Sydneysiders to budget for a home.

Finder's research shows that 17% of parents have chipped in for a house deposit while 7% have gone guarantor for their child. But the funding doesn't stop there – a further 7% of parents help their children out with mortgage repayments as well.

How to financially support your adult kids

Offering financial support to adult kids can be the big break they need to get ahead, especially for big-ticket items like a home loan or tertiary education. But this generosity can sometimes come at a cost. That's why as a parent, it's important to safeguard your own financial position and be realistic about the potential risks involved.

• Encourage financial literacy. It's never too late to teach children (or grownups) how to handle money responsibly. Teach them how to save, compare bank accounts and how to set up their own emergency fund. If you are comfortable, talk to them about some of your own financial mistakes in the past so they can learn from them.
• Protect your own emergency account. Make sure you have an emergency stash of cash set aside that is for your own personal use. You never know what the future may hold, and it's important you have enough to cover any unexpected costs like emergency medical care, car trouble or vet bills.
• Set up a payment plan. If you lend money in the form of a "loan", draw up an agreement so repayment expectations are clear from the start.
• Make informed decisions. If you agree to go guarantor on your child's home, make sure you've researched all possible options (including best and worst case scenarios). It can be a good idea to see a mortgage broker or financial planner together, to ensure you're making the right decision.
• Help your kids to help themselves. Everyone falls short of cash from time to time. But if this is becoming a regular occurrence for your kids, they may have budgeting or cash flow issues. Brainstorm ways they could support themselves; this may be through a second income stream, new job or downgrading their lifestyle.