I hate jokes and condescending comments about grown children living at home, or about those who return to the family nest due to financial need.
In the interest of teaching young people how to be financially responsible, we often applaud parents who rush their adult children to move as soon as possible. If they stay too long, they are perceived as resisting “growing up”.
Rents are rising at the fastest rate in decades, and house prices are rising too. It’s time to accept the economic truth that living independently at an early age can get in the way of real financial security.
It is clear that not everyone can live at home. They left because of work, or the home environment is too toxic or overcrowded. But if there is space and sanity, consider the savings young people could accumulate if they continued to live in the family home.
With inflation at its highest level in 40 years, it just makes economic sense for adult children to live at home for a few years.
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Overall, prices rose 8.3 percent in April from a year ago, according to the latest composite consumer price index from the Bureau of Labor Statistics.
The cost of housing is a big driver of rising inflation.
According to Zillow’s Rent Index, rents average $1,927, up $323, or 20 percent, since the start of the pandemic. Of course, depending on the location, the monthly cost can be significantly higher. The median rent in April was around $3,000 in New York, $3,100 in San Francisco, and over $2,800 in the Miami-Fort Lauderdale area.
Last year, rents rose more than in any other year on record, according to Zillow. Strong rental demand keeps vacancy levels close to historic lows, driving up rental prices.
The pandemic has pushed millions of Americans to move in with family members, according to the Pew Research Center. But now that the incidence of coronavirus has decreased and businesses have returned to normal, many people want to live on their own. After all, we’ve been taught to think you’re not a real adult until you have your own home.
Living alone is seen as a sign of economic maturity.
But the high cost of housing makes it almost impossible for many young people to build a cushion to deal with the financial crisis. Their housing costs may prevent them from paying off their student loans quickly. Excessive rent payments can delay them from starting to save for retirement. And we know that the power of compound interest favors the young.
People keep asking me what I recommend to people struggling with rising inflation. The answer for many is to do your best to cut the biggest expense in your budget, and that is housing. This may mean that you cannot afford to live alone.
Pew analyzed census data from 1971 to 2021 and found that the number of people living in multi-generational households has quadrupled.
According to Pew, when asked why they share their home with relatives, Americans often answer that it’s because of finances or family concerns.
Among adults aged 25 to 29, nearly a third live in multi-generational households, often at their parents’ homes, according to Pew. Nearly 4 out of 10 young people live in multi-generational families.
And while a quarter of adults in multi-generational families say it’s stressful all or most of the time, more than twice as many say it’s mostly or always helpful, Pew found.
I sympathize with the men who are ridiculed for still living at home and the daughters who are forced to leave.
My husband and I went the other way with our kids. We begged them to live at home. We want them to be here for at least 30 years. Hear me out before you claim we were just coddling them.
A year after completing her master’s degree and internship in Texas, our older sister has moved home and is saving most of her yearly income. At 27, she spends 15% of her gross salary on 401(k). She is saving up to pay cash for an electric car in about three years.
Our son graduated from college last year and still lives at home. He works two part-time jobs while studying to enter the actuarial field. We’re in no hurry to let him go. He’s a pleasure to be around, and he’s also the head dog walker.
My husband and I agreed not to take rent from any of our children while they were saving so that when they finally started working they would have a solid airbag to keep them from boomeranging home.
Financial independence doesn’t have to come with monthly rent. It can be measured by how well the people under your roof manage their money within their means.
We must advocate for long-term, multi-generational housing as a way not only to beat inflation now, but also to help the younger generation build wealth that will also help them weather the financial storms to come.
If you are a productive young person trying to save up or pay off debt, or both, this is not a sign of a stop in development.
It’s a smart move when rent can eat up so much of your takeaway paycheck. Let your adult children get rid of the heaviest burden in their budget. They will have enough time to manage their households.
Ten years at home, starting at age 20, and keeping most of your income instead of paying rent for all those years, can put young people on a home buying path that may end up with fewer or no mortgages. This would change the financial rules of the game.
Michelle Singletary is a personal finance columnist for The Washington Post. Her column comes out on Sundays.