Need a loan? Go ask Dad
June 29, 2012
There are significant differences in the way mothers and fathers address money matters with their adult children. That is the core finding of a new report issued by Ameriprise Financial.
The study looked at how mothers and fathers discuss finances with their adult children, as well as how likely they were to lend money to support their sons and daughters. According to the results, boomer women are more likely to have regular conversations about their money and health-care costs. But when it comes to actually lending money to an adult child for a major purchase, men tend to be the ones offering support.
Adult children benefit from boomer parents
Despite the differences between genders, virtually all boomer parents surveyed reported providing some funds to their adult children. The survey found 93 percent of baby boomers said they had given their adult children financial support.
However, when it comes to major purchases, fathers are more likely than mothers to open their wallets and share the wealth. Ameriprise found the following percentages of men compared to women were willing to help with their children's purchases and bills:
- Fund an automobile purchase: 58 percent vs. 48 percent
- Pay for their child's auto insurance: 51 percent vs. 43 percent
- Co-sign a loan or lease: 42 percent vs. 32 percent
- Make a car payment for their child: 37 percent vs. 29 percent
In addition, fathers were more likely than mothers to say they would help an adult child buy a car or pay off their credit cards rather than contribute to their own retirement fund.
Women more willing to have money discussions
While men are more willing to share their money, women are more likely to talk about it. When it comes to finances, health-care costs and family issues, boomer women tend to discuss these issues in greater percentages as compared to men. The trend seems to continue to daughters, of whom 67 percent report regularly discussing finances with family, as opposed to 59 percent of sons.
One reason boomer women may be more likely to have these discussions is concern for the future. Only 14 percent of mothers say they are very optimistic about their financial future, as compared to 21 percent of fathers. In addition, a mere 16 percent of these women are very confident they will reach the financial goals they feel are important.
However, children appear to be returning the favor of their parents' financial support by increasingly lending a hand to their mothers and fathers. Daughters, in particular, have reported a significant increase in the amount of financial support and household help they provide their boomer parents. Two in three daughters say they now provide some form of support to their parents, as compared to 48 percent who said the same five years ago.