Young adults are moving back home to live with their parents. The return is due to inflation, low-paying jobs that don’t cover their burdensome college debt and exorbitant rental prices in places, like New York City, where the average apartment price is around $5,000 per month.
The situation for Millennials and Gen-Zers is untenable, as inflation raises the costs of everything from gas to dining out. When you factor in the costs of insurance, a car, phone, food and other recurring bills, there is little money left over to save for a home. For many young families starting out, purchasing a home with increasing interest rates and needing a 20% down payment makes it unaffordable. The Gen-Zs and younger Millennials may be the first modern generations to have a lifestyle that is less than their parents.
The Boomerang Return Back Home
LendingTree surveyed more than 1,300 American parents, Gen-Zers and Millennials, and researched United States Census Bureau data to gain a sense of how many young people are living at home. It found that around 32% of Millennials and Gen-Zers returned home during the pandemic, and more than two years later, 67% of Millennials and Gen-Zers are still living with their parents.
During the pandemic, the Pew Research Center, a nonpartisan Washington, D.C.-based think tank, found that around 26.6 million young adults boomeranged back home. Pew pointed out that the number of young adults who are living with parents would have been even higher if the research included young adults who elected to reside with the parents of their spouse or partner.
It’s Common In Europe
Europe primarily has a different take on family living together. It was and still is common for multi-generations to live under the same roof. Each country differs, but the number of people staying at home is significantly high. In Northern Europe, it ranges from about 16% in the Netherlands to 52% in Ireland. In the southern and eastern regions of Europe, the percentage of young adults co-living with parents and other relatives is over 50%. In many Balkan countries, around 70% of young adults live at home.
It Is Fiscally Smart To Return Home
With student loan debt and the high costs of living, a young person won’t be able to save money, build a nest egg, invest in the stock market or start a business. They are financially trapped. One of the ways out of this predicament is to move back home and start saving money to build a life for themselves.
Older generations, such as the Baby Boomers, may mock this decision, but they benefited from a strong economy, plentiful jobs and substantially lower housing and apartment prices. College costs were a small fraction of what they are now. The world has changed and, unfortunately, many Americans need to swallow a little bit of their pride in the short term to create a better future.
Ignore The Haters And Do What You Need To Do
You need to defer gratification. Spend a few years living cheaply without making large expenditures. This entails forsaking expensive vacations, fancy dinners, buying the latest gadgets or splurging on clothes. Put aside the money saved. The funds could be allocated to a bank account, IRA, mutual fund, stocks, bonds or the funding for a new startup business.
Others may mock you for still being at home. Today’s consumer-based society pushes everyone to spend more than they have. Of course, the corporate establishment wants you to move out of your family home. At scale, millions of young people will need to buy furniture, television sets, Netflix and other subscriptions, computers, cars and other necessities. Living at home, you can communally share these costs and have enough money to save or invest.
It may not be the ideal set of circumstances, but sometimes you need to endure tough times to build a better long-term life for yourself. Working hard, saving and cutting costs will eventually enable you to lead a better life. Over time, you’ll see the benefits. The money saved will offer you more freedom down the road. You won’t need to accept a horrible low-paying job, working for a micromanaging boss, just because you’re financially desperate. Having your living expenses under control will provide you with options. You can wait for the perfect job that can catapult your career.