Living at Home: Avoiding Debt at the Cost of Independence?



A record number of millennials are living at home. Are they living the high life or avoiding the high cost of living? It’s much more the latter but it does make me wonder if this trend will extend the era of delayed adulthood.


According to a Pew Research study, 21.6 million young adults aged 18-31 lived at home with their parents in 2012, up from 18.5 million just before the recession.


50% of these millennials are still in college so only half, or about 10.8 million are living at home to save money while underemployed or unemployed…and perhaps some because they like it and it’s easy (or they are Long Island Princesses).


You can’t argue that it’s not a good idea to offset the cost of student loans and / or avoid credit card debt that can easily spiral while trying to live an adult urban life.


When asked what they wish they knew then, many 40-somethings respond… avoid credit card debt at all costs!


“I got slammed with credit card debt. I had a couple of cards that extended me $500 credit and suddenly, I owed $14,000 because I paid the minimums and skipped a few payments.  It was traumatic and it can hurt you for life. I wasn’t able to buy a house until after I was forty. I still feel the impact of it. My advice on that is just steer clear of the credit thing. – 40-something, Los Angeles


Her advice on how avoid this fate and live within your means here.


And there is no doubt student load debt is crippling.  But on the other hand, most 40-somethings attribute getting out on their own with giving them a head start on gaining independence and developing the confidence to make decisions that are right for them.

“I would absolutely recommend moving out because one of the beauties of this culture is the notion of being able to stand on your own feet and being independent. And creating that environment for yourself. That is critical.” – 40-something, financial advisor, NYC


Other who stayed wish they had ventured further from the nest.

“I went straight from my parent’s house to a dorm to my parent’s house to my husband’s house. I went from my Dad’s insurance my husband’s insurance.I can’t say I regret it but those are things I wish for my kids. I wonder if my relationship would be different  if I had been someone in between a daughter and a wife.” – 40-something, Milwaukee


Scott Hess, a millennial expert, also sees living at home as a key trigger to adulthood.

“In our work we find the greatest predictor of “growing up” is when parental underwriting is removed (Mom and Dad stop paying the bills). Any guy or girl that’s still being subsidized is less likely to seem grown up, regardless of age.” – Scott Hess, 40-something, millennial at heart.


But the independence also comes from learning how to manage money …not just being away from home. You can’t try to replicate the lifestyle you had at home in your first apartment (and your roommates are not your parents).


In your twenties you may think freedom and independence is being able to buy things for yourself, or to “put it on my tab” but real freedom is being financially independent and free of debt.  You need to have a little fun and need to build a credit history, but as in all things, choose your indulgences wisely.” – consultant, NYC  (original post here.)


20-somethings today and their parents have closer relationships than those in the past so I’m sure many of these parents are happy to have their kids at home a little longer.


I just wonder if there is a better solution…


What if you added up all the money the parents spend on an adult child living at home and contributed that to their rent. Would that be enough to keep you above the red line while giving you all the experiences of doing things on your own?


Financial advisers say hosting an adult age child back at home can cost between $8,000 a year to $18,000 a year, depending on how much parents are shelling out for extras like travel and entertainment.


It is possible to do it without living beyond your means. And perhaps that will create more meaning for you (some ideas here).


I moved to NYC making $14K a year and my parents paid half my rent until I started making more money. The job was low paying even at the time but it gave me experience I wanted and paid back in spades. I am grateful to my parents for making it possible. I didn’t get in too much trouble with credit cards. Luckily living in the West Village then was nothing like today.  There were no Marc Jacob shops on Bleecker to get me into trouble. I was able to strategically parse together a wardrobe that got me by in style and manage my tax return for summer-house getaways.


The one thing true of cities is that there is free culture there for the taking (of for little money). It’s true…. I know I learned a ton and had loads of fun. I hope every 20-something has some of the experiences I had. Problem is they just might not be as fun at 26 as they were at 22!

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