8/16/2013 7:30 PM ET|
Face your fears! Time for Gen Y to leave the nest
These 5 steps can help young adults prepare to fly, and not like a boomerang.
More than one-third of millennials, aged 18 to 31, still lived with their parents in 2012 -- the highest percentage in at least four decades. There are several factors behind the trend, including higher unemployment, delayed marriage and rising college enrollment.
There also seems to be a growing acceptance that it's OK for twenty-somethings to hang out at home for years longer than past generations did. For those who are ready to leave the nest for good -- and their parents -- some common-sense tips might help make the journey safer and easier.
I'm 28 and sharing an apartment with my mother and three of my siblings. I can't really afford to live on my own. Debt is up to my eyeballs. What can I do?
It may comfort you to know that you have plenty of company. A Pew Research Center analysis of U.S. Census Bureau data found that 40% of young men 18-31 and 32% of young women lived in their parents' home as of 2012. Part of that may be explained by rising college enrollment: In March 2012, 39% of those aged 18 to 24 were college students, compared with 35% in March 2007.
But even among the unemployed, the single and those in college, a greater share lived with their parents in 2012 than in 2007, suggesting a growing acceptance of the phenomenon.
Most people aged 18 to 34, and most parents, believe it's acceptable for college graduates to live with their parents for up to five years after they finish school, according to a Coldwell Banker Real Estate survey. (Those age 55 and older generally believed that even three years was too long.) Meanwhile, one in four parents believe it's OK for adult kids to live with their parents as long as the kids want.
Returning to the nest may be a comfort for both kids and parents, but there are plenty of potential problems. Emotional and financial development is delayed, since establishing independence is an important step in adulthood. Meanwhile, leaning on your parents financially can hurt their ability to save for retirement, which means someday they could boomerang on you.
So it's time to make a plan:
1. Review your employment prospects. Are you trying to get by on a below-average salary in a place with above-average living costs? Millions try to scrape by in notoriously high-cost cities such as New York, San Francisco and Los Angeles, often with disastrous financial results. Moving somewhere cheaper could help you jump-start your transition to adulthood. You don't have to live in the boondocks or even accept permanent exile from your hometown. You just have to find an area with a cost of living that makes sense, giving your current means.
2. Consider adding a side job. You have more energy and fewer obligations than you likely will in a few years, so now is the time to really hustle to earn that extra cash. Read "Should you take a second job?" for more.
3. Aim for a rent that is no more than 25% of your income. In many areas, that means you'll have to find roommates. Spending much more on housing could leave you without enough cash to pay your other bills, reduce your debt and save for the future. Other options to get cheaper rent: Manage an apartment building, live as a companion to an older person or offer yourself as a live-in, part-time au pair to a family with kids.
4. Come up with a strategy to deal with your debt. If you have federal student loans, it's often advantageous to consolidate them into one loan with the longest payback period possible. This will free up cash to throw at other, more troublesome debts, such as credit card bills and private student loans. Once those obligations are paid off, you can return to your federal loans and make extra payments to retire the debt faster. For more, read "A debt payoff plan that works."
5. Adjust your expectations. Unless your family is fairly poor, you're unlikely to be able to match the lifestyle they provided when you move out on your own. That could mean doing without stuff you take for granted, such as pay television, a fat data plan for your phone, new clothes and eating out frequently. The good news: If you make smart financial choices now, you should be able to restore these luxuries in time. The better news: Meeting the challenges of adulthood on your own will demonstrate what you can accomplish once you put your mind to it. That knowledge will help you surmount obstacles and succeed for the rest of your life.
Liz Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "The 10 Commandments of Money: Survive and Thrive in the New Economy" (find it on Bing). Weston's award-winning columns appear every Monday and Thursday, exclusively on MSN Money. Join the conversation and send in your financial questions on Liz Weston's Facebook fan page.
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I am a widowed mother and out of my 4 kids, 3 have lived with me at various times while transitioning to their own places. My youngest just left a couple of months ago at age 27 but he contributed to expenses and was a joy to have around. I'm on my own now and feel my kids are fine.......my son living with me actually helped ME many a time when I was struggling to cover expenses. I'm all for families.......not free loaders......but families. We live in an economy that is often hard for one person to pay all the expenses. There are many nuances to this story.
Part of me thinks were raising a bunch of lazy, entitled brats....
And part of me thinks American wages haven't matched our cost of living increases. My father raised two kids at a middle class office job while my mom raised kids at home. Now that's just not an option.
Maybe things would get better if companies cared more about their employees than their stock prices.
I own a paint and body shop.
1. Kids in their twenties live with their parents now. The parents raise the grandchildren and the twenty something's work for me until it gets hard.
They quit, because they don't have bills or responsibility.
Mom calls to cuss me out for not filling out the food stamp application. Kid keeps it 30 days and gives the form to me with 1 day before due. I have to fill out salary history of each week of pay.
These guys are only working to save money to buy rims, stereos, etc. They are not that worried about rent, their kids, nothing.
2. The older experienced workers run this scam: the wife claims they are separated and living apart. The wife gets govt. check and body man does side jobs (with my stolen material). When it gets hard at work, they quit because they have money. They try to come back after they have spent their money, sorry ain't happening.
3. half of the men hired get their wages garnished for child support. It takes sometimes several weeks for the gov't to catch with them at their new job. I have to do the admin to get the ex wife paid through payroll deductions. The state sends threatening letters to me routinely, the employee complains that he cant live on the garnished wages and everyone gets mad at me.
I DIDNT HAVE YOUR STUPID KID.
People do not want to work anymore. Its real, its now, its no BS.
There is no magic to making money. You have to work harder than the next guy.
The world is out there for kids that realize this.
Hardly any do.
WE have created a economy that takes 2 people working to own one of these overpriced houses
Housing is unaffordable for a lot of single people. Yet the government, fed reserve , banks and
economist think its wonderful when prices go up. MORE and More of disposal income tied up
in housing market. Some how when value on house down street rises its good for the economy.
didn't we just go thru this ponzi scheme , flip this house.
When the price of gas or a ipod go up everyone will bitch. When the price of real estate goes up
Its party time. I guess everyone wants to get in on next real estate ponzi scheme
I like how everyone specifically picks on people who live at home. What about everyone that "is out on their own" that still mooches off their families financially? I know plenty of people in their 20s, 30s and 40s whose parents help them pay rent, pay for their cars, pay insurance, pay cable bills, buy them food, take care of their kids, etc. but as a society we'll only knock those that live under the same roof as their parents?? The way I look at it, some kids have their parents foot the college bill; others couldn’t so this is how they’re helping their kids get ahead. Sorry but it’s just the same thing, different form.
Yes, I'm 27 and live at home but it has not stunted my emotional or financial development as this article suggests. I thought I'd be out by now but you know what happened? I graduated in 2008 with a finance degree and because the market was awful I took a low paying job that only required a high school diploma so I could get my foot in the door, gain some experience and establish a career path. Those wages were never enough to support rent with roommates and paying my student loans (which were my choice no matter where I went to school and I don’t regret). THESE WERE MY CHOICES. So, I've lived at home, paid off a substantial amount of student loan debt, pay for everything else in cash, and have gotten several promotions and raises due to hard work. Now, I've made the ultimate decision to go back to get my graduate degree because of what I want to do and guess what? I'm paying for that out of my own pocket, still paying my bills, still paying off my undergraduate tuition and no I don’t take fancy vacations (I’ve never taken fancy trips). I get paying for housing, utilities and food are a big expenses but I NEVER ask my parents to pay $$$$$ for anything. I pay for my housing with sweat equity, meaning I spend my weekends to clean, cook, landscape, do yard work, etc. I know most people my age don't do that stuff for their parents as they'd rather spend it partying/vacationing.
I’m not unemployed sitting on the couch all day, out partying at all hours of the night, etc. So does this make me a lazy, entitled bum? I don't think so. Who the hell cares where I call home? Why does it matter? It's what I'm doing with my time and how I'm being a productive member of society that counts.
I suggest a follow up piece for parents about how the heck to get the little freeloaders to actually leave. My In-Laws still had Junior living with them until they died. He was 45 and didn't know where to go when the house had to be sold.
His parents had tried to get him to move several times, but fell short of knowing how to be firm enough without feeling badly. Or so they said. He had never learned how to do laundry. He had a job, but had never paid rent. There was never a transition plan in place to get him to move on, regardless of his wishes.
He is now living in a rental and is still calling us for advice on every little thing. We are supportive but not too much so, if you know what I mean. He had to start his independent life anyway. It was late by 20+ years but it still had to happen. It was so much MORE painful than it would have been at 20-25, because he didn't have the support and guidance his parents could have wisely provided.
strategically living at home to SAVE money makes sense.
yes you should help out with some expenses, but you should be coming out ahead cost-wise.
that means however not blowing all those savings.
I lived at home till age 28..yes not the 'coolest' thing, but I finally saved enough to buy my first condo in 1999 for $235000.
so its about instant gratification versus saving for later...of course I had the option as my parents were close enough to the job so that I could commute.
I'd like to know how this 28-year old has so much debt. It can't all be student loans. I'm guessing she has a lot of credit card debt, because she wants to have every new electronic toy and the latest Jimmy Choo shoes. If she's living at home and working, she should be paying down her debt. She should make out a budget, and stick with it - even if that means she can't have her $8 Starbucks every day, or can't go out to lunch/dinner/movies, etc., all the time. She's obviously never learned how to handle her money, but your advice doesn't include any of my suggestions. How about setting her straight on her responsibilities?!?
Many years ago, a man went out and earned a living while a wife stayed home and took care of the children (not saying this was right.... but that's the way it was). Next women entered the workforce and the additional money to the family income was "nice" but not required. Soon that changed and two working people were required to sustain a family.
This is just the next step..... Four working adults to provide for 6 people (2 grand parents, 1 child 1 spouse, 2 grand children). In one way or other, this will become the new normal..... and society is responsible for this change.
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