The Bank of Mom & Dad
"Brother can you spare a dime?"
"Father and Mother can you spare a grand?”
"Brother can you spare a dime?" is considered the anthem of the Great Depression.
Father and Mother can you spare a grand is going on right now.
Nearly one in five Mainers since the beginning of the pandemic nearly a year ago have received "Bank of Mom and Dad" funding. Sure, they are expected to pay the loan back when things get straightened out, but most of the money is interest free.
What are the kids buying with that money? Well unlike the stimulus check money which lots of 20 somethings spent on bigger flat screen TVs, this money they’re borrowing is for essentials, like rent and a car, and groceries and childcare.
Almost a third of 20 to 29 year-olds in Maine said the first place they would turn to cover a sudden $1,000 expense they don’t have the funds for would be good ole Mom and Dad. We might be onto something, The Bank of Mom & Dad has a nice ring to it.
"We are living in unprecedented times," says Martin Brieger, editor of USAWillGuru.com. "The Bank of Mom & Dad is as old as the history of finance. However, what we are seeing now is a squeeze on both sides, with data showing a significant proportion of parents unable to provide the full amounts requested by children. We expect to see a trend of parents funneling funds previously set aside for inheritance to be transferred earlier than previously planned."
The survey from USA Will Guru is here.