WASHINGTON—Stressing the importance of being able to financially support their kids during one of the most significant periods in their lives, a growing number of parents are opting to put aside money for their children’s unemployment, a report published Wednesday by the Brookings Institution has revealed.
According to the report, parents across the United States are saving a greater portion of their incomes than ever before, hoping they will be in a position to help with costs when their kids reach young adulthood and begin their jobless years.
“Parents naturally want to provide for their children’s future, and today they are increasingly aware of how much they will need to pay when their child enters unemployment,” said economist Belinda Sayers, the report’s lead author, who noted that the average cost of a year of joblessness was steadily rising, adding that families with two, three, or more kids had to put even more aside for helping multiple children through unemployment. “The expenses really add up—housing, meals—and young people often stay jobless for two years, four years, and sometimes even longer. That’s a large burden on their parents.”
“More Americans are planning ahead now so they’ll be ready when their kids grow up and head off into a workforce that can’t absorb their numbers,” she added.
The report also found that the average parent begins saving earlier now than in the past, often before a child is even born, making an effort to deposit a small portion of each paycheck, tax refund, or holiday bonus into an account specifically designated for their son or daughter’s unemployment.
While many young adults are eligible to receive federal aid for their joblessness, sources said outside assistance of this kind only covers a small part of the total cost, leaving parents to pick up the remainder of what can be a very substantial tab.
“A lot of people wait too long to start saving, and before they know it, their children’s unemployment is upon then,” said Scott Rosen, a Philadelphia-based financial adviser. “At that point, it’s too late, and they find they can’t afford it. It’s important not to underestimate the strain your jobless kids can place on your finances. Starting your child’s unemployment savings now is the only way to ensure you’ll be able to cope when the costs start piling up.”
“The annual bill can be enormous, especially when a child is unemployed out of state,” he added.
Numerous parents reached for comment told reporters they were making sacrifices now in the hopes they won’t find themselves strapped for cash when their children get older and are unable to find work, with many admitting to putting off family vacations, purchasing more economical cars, and discontinuing dining out.
“Now that my son is out of the house, desperately searching for a job and having no luck, I’m really glad we put aside all that money,” said Karen Franklin, a 41-year-old mother from San Diego. “My husband and I took great pains to make sure our kids would have an easier time than we did when we were young and unemployed. Things are more expensive now, but hopefully we’ll be able to cover him for the first year or two.”
“My parents didn’t save any money for my unemployment, and when it finally arrived, things were really, really hard,” she continued. “The truth is, I’m still paying off the debts I took on during my own jobless years.”