Nearly two in five American parents with young children expect to receive financial help from their own parents or grandparents over the next year, as the cost of raising a family puts increasing pressure on household budgets.
The BMO Real Financial Progress Index found that 37% anticipate support from older relatives. Some families are also relying on grandparents for childcare, help with housing costs and contributions towards their children’s future.
Some 82% of American parents said the cost of raising children had “gotten out of control”, while 86% said expenses such as daycare, after-school activities, summer camps and school supplies were making it harder to save.
More than three-quarters said financial support from extended family was essential to afford opportunities for their children.
The growing cost of raising children
Among parents expecting assistance, 43% said they depended on grandparents to provide childcare. A further 26% said relatives would help fund their children’s futures through a 529 plan or another savings account.
Childcare costs are a significant part of the strain. Care.com’s 2026 Cost of Care report found that parents spent an average of about 20% of their annual income on childcare, with roughly one in five paying more than 30,000 dollars a year.
The US Department of Health and Human Services has identified 7% of family income as a benchmark for affordable childcare.
The Care.com report also recorded a growing mental health toll, with about 80% of parents spending almost every waking hour focused on someone other than themselves. It found a 5% increase in the proportion who had considered suicide or self-harm.
“Parents are being pushed well beyond their limits by the demands of caregiving,” Brad Wilson, chief executive of Care.com, said in the report. “If this continues, care pressures risk pushing more parents to cut back or step away from their careers. That will only deepen financial strain and emotional stress, trapping them in a system that continues to fail them.”
Robin Growley, BMO’s US head of consumer products, said families were being forced to balance immediate costs against longer-term priorities.
“Raising kids has always been a labor of love, but right now, it is also a major feat of financial engineering with families torn between spending on the urgent and the important,” she said. “Whether you are budgeting for diapers or dorm rooms, the absolute best antidote to daily financial stress is a clear, actionable plan.”
Family support is also playing a role in home ownership. BMO found that 60% of Gen Z homeowners and 57% of millennial homeowners said they could not have bought a home without financial help from relatives.
Nearly six in 10 Gen Z adults expected either to receive or ask for financial assistance from their parents or grandparents.
The findings come as a large share of wealth is held by older Americans. Cerulli Associates estimates that 124 trillion dollars will be transferred by 2048, including nearly 100 trillion dollars from baby boomers and older generations.
That wealth is unevenly distributed, however. Federal Reserve data showed that the wealthiest 1% of households held about 30% of total assets in the second quarter of 2026, compared with roughly 5% held by the bottom half.
Location can determine whether families are able to benefit from relatives’ help. BMO found that 45% of Americans with young children lived close enough to receive support, saving an average of 1,915 dollars a year on childcare and 1,443 dollars on groceries compared with parents without nearby family assistance.
But the arrangement can bring additional responsibilities. Seventy per cent of parents receiving family support were also responsible for the financial or emotional wellbeing of ageing parents, compared with 45% of parents without family living nearby.
About seven in 10 parents living near relatives who provided childcare described themselves as part of the “sandwich generation”, supporting children while also helping older family members.
“Most people make decisions to live near family with their hearts, not their spreadsheets, but those choices carry real financial consequences,” Growley said. “Having a grandparent help raise your kids can be one of life’s greatest gifts, but family caregiving is often a reciprocal arrangement—and it can be a lot when you’re already stretched thin.”
