How To Financially Support Your Baby Boomer Parents and Not Go Broke
Written by
Chris Adam
Edited by
Chris Cluff
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
It can be a tough situation when you see your baby boomer parents struggling with money issues and you feel the need to step in with financial support. On the bright side, millennials may have a bit more money on their side.
According to economist Kevin Drum of JabberWocking.com, the average 40-year-old millennial had an income of $49,000 in 2021. That’s more than the $39,000 the average boomer earned when they were the same age.
According to the U.S. Census Bureau, about 4.3 million adults in America gave voluntary financial support to parents in 2020. For perspective, that’s almost as many as the 4.4 million who made mandatory child support payments.
Here are some things to consider and actions to take when you think it’s time to financially support your parents but don’t want to go broke.
Build Budgets
If you already hate building a budget for yourself or your own family, get ready to have twice the pain. If you’re going to seriously help financially support your baby boomer parents, you’ll want to have a roadmap for doing so.
That roadmap is likely in the form of two budgets — one for yourself and your family and one for your parents. You can then better see how much financial help you can give your parents without hurting your own money situation.
“When building these budgets, be sure to add in a line item for unexpected expenses,” according to Commerce Bank. “Health care issues in particular can develop quickly and add up fast, so it’s best to be as prepared as possible.”
Reduce Expenses
That budget for your parents may also help you reduce their expenses. You can see where their money is going and possible areas to cut back.
You could look for big and small ways to reduce expenses. Perhaps you could help them cancel services they don’t need and cook them some meals so they don’t eat out as often. On the bigger scale of things, maybe it’s time to have a talk with your parents about downsizing and moving to a smaller home. You may even consider having them move in with you.
Set Rules
This may be a point in helping your parents financially where it really feels like the roles have reversed. You’re going to need to set ground rules.
These rules will look different depending on your situation, your parents’ situation and your relationship. You may set rules about how much money you can give or how often. If you have siblings, this may be a time to get them involved. Or maybe it’s time to look into the services of a financial advisor.
Stay Out of Debt
You may want to keep giving your parents financial assistance with no end in sight. However, it’s important to not give so much that you go into debt.
“For goodness sake, don’t put your own finances in jeopardy by borrowing to rescue a parent,” Michelle Singletary wrote in a Washington Post column. “Racking up credit card debt or co-signing on a loan for them may not end well for you.”
More From GOBankingRates
