A new CreditCards.com poll shows young adults drowning in debt can probably turn to their parents for a financial lifeline.
The survey asked parents how they’d respond if their child asked for money to pay off a debt. Only one parent in 10 would refuse to help financially.
CreditCards.com industry analyst Ted Rossman said parents are really generous. More than half would give $1,000 or more.
“The average parent would give their child about $5,700 to pay debt, if they do not expect to be reimbursed. And then, it’s closer to $8,000 if they do expect to get their money back,” said Rossman. “We all understand that sometimes life happens. But, as parents, I think we need to set limits and teach our kids how to stand on their own two feet.”
Parents are most likely to help if it's a medical debt, mortgage, rent, utility debt, due to falling on hard times, like the child lost a job or temporary situation.
The survey found credit card debt carries less stigma nowadays than it did in since 2009.
Parents who said they would never help with a specific type of debt:
- Gambling debt (57.3 percent)
- Credit card debt (15.9 percent)
- Auto loan (8 percent)
- Student loan (6.1 percent)
- Mortgage or rent (4.1 percent)
- Utilities debt (3.9 percent)
- Medical bills (2.1 percent)
The poll found that Dad is twice as more likely to give and hand over more money than Mom.
If they don’t expect to be repaid, 18 percent of dads would give more than $20,000 compared with only nine percent of moms.
The average dad not expecting repayment would give $7,045 while the average mom would give $4,643.
The survey found parents with household incomes of under $30,000 were about as likely to help their child with debt as those in higher income brackets. Income did not make a significant difference in willingness to bail out a child in debt until the top income bracket of $75,000 and up.
Giving more than $20,000 to bail out a kid in debt:
- 10.9 percent of those earning less than $30,000
- 7.9 percent of those earning $30,000 to $49,900
- 6.7 percent of those earning $50,000 to $74,900, said the same
Experts say teaching better money habits may be the best help parents can offer.
If parents have the money to bail out their children, remember not to hurt your own retirement goals or put yourself in a financial bind.