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The Case for Living With Mom and Dad

To Rep. Paul Ryan, college students forced to move back in with Mom and Dad are the poster children for the bad economy. But from a personal finance perspective, experts say returning home can be a triumph.

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“College graduates should not have to live out their 20s in their childhood bedrooms staring up at fading Obama posters and wondering when they can move out and get going with life,” Ryan said at the Republican National Convention this week. It is a growing trend: There are more adult Americans age 34 or younger sleeping in their childhood bedrooms now than at any other time in the past 30 years, studies show. Nearly one-quarter of those ages 20 to 34 were living at home between 2007 and 2009, up from 17% in 1980, according to a study released this month by Zhenchao Qian, of Ohio State University. The rate is closer to one-third for 25- to 34-year-olds, says Kim Parker, the lead researcher on another recent survey, “The Boomerang Generation.”

But just because more young adults are moving in with their parents doesn’t mean it’s a bad thing. Andi Cooper, 31, a communications specialist from Ridgeland, Miss., who recently moved in with her parents, says people shouldn’t feel sorry for her. “I’m extremely happy,” she says. And she’s not alone. Some 78% of those surveyed in the Pew study say they’re satisfied with their living arrangements and 77% feel upbeat about their future finances. “If there’s supposed to be a stigma attached to living with Mom and Dad through one’s late 20s or early 30s, today’s boomerang generation didn’t get that memo,” Parker says. It may also be part of a larger cultural shift: People are also getting married later in life and flying the coop later, Qian says.

To be sure, many young adults are living with their parents strictly because of joblessness, low wages or high housing costs. About one-third of 25- to 34-year-olds say they moved back or never left because of the economy, the Pew report found, up from 11% in 1980. But there’s a silver lining too. Nearly half of these young adults say they have paid rent to their parents instead of to some anonymous landlord, and 89% say they have helped with household expenses, the report found.

And many college graduates in their 30s who still live at home to save money say they’re glad they avoided buying a home at the peak of the market. Cooper says she has a lot of friends who bought homes in their 30s, before 2008 — and are now unable to sell them because they have negative equity. Despite having a graduate degree in Wildlife Science and a well-paid job, she says she never even considered buying a house. “I definitely feel blessed to have dodged that bullet,” she says.

Moving back in with one’s parents may even make sense for those who can afford a place of their own, others say. “Living at home promotes saving,” says Sheldon Garon, a professor of history at Princeton University and author of “Beyond Our Means: Why America Spends While the World Saves.” He says it could help students pay off the $1 trillion they now owe in student loans. “There has been a staggering increase in student debt in the last few years,” Garon says. “It may make a lot of sense for young people to trim their costs.”

On a personal note, college graduates also reap the benefits of having two mature roommates who can give them valuable advice about planning their future. Qian says this is a critical time for many young people. Case in point: Jennifer Marcus, 26, a public-relations executive and television blogger, works in New York and moved back to her childhood home in New Jersey last September. “They gave me emotional support after a really tough breakup,” she says. “I also switched jobs this year and my parents were monumental in helping me with that decision.”

 

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    • These kids are not going to ever have enough access to wealth to launch themselves. They are the new poor – not in trailer parks (too expensive anyway) or tent cities (banned) or poorhouses (too cruel). Because their past is bleak, their future will be as well. The problem is that the middle class professionals end up with non-successful professional kids that have no other options (no family business, extreme competition for scarce survival jobs (1000 applications for a 10-job window washer position)). Their fate was sealed by past decisions and all current activities are futile – 50 more years of natural life is a long time to linger in the unredeemable self-defeat

    • Baby boomers may have worked hard, but in general they have been intellectually lazy when it comes to finances or how capital markets work. Every day I encounter parents of friends who are completely upside down in their finances because of ignorance. Financial illiteracy is something we cannot afford and it is something that the average middle class boomer cannot teach to their kids. If you think simply going to college is all kids need to do – you are wrong. Going to college is a risk/reward proposition that often involves different financial instruments, but for most it is mainly loans/debt. Many boomers have shuttled their kids into college, but couldn’t prepare them to assess financial risk, and now they want to kick them out the door. The internet has not made things easier – it has made finding a job more competitive. Parents need to wrap their heads around the idea that most colleges are overpriced. The value proposition has been eroding away for some time. In the capital markets there is always someone left holding the bag when the down trend occurs. If college kids are saddled with a mountain of debt that they will never be able to pay off because of market forces that most of the adults around them could not percieve – whose fault is it when they are finaly forced to make a decision based on economics? It will probably be the first one that they have made their entire life.

    • Ah yes, there’s always a bright side to bad economic news when a Democrat is in the White House. Unemployed? An opportunity for more time with the family. Have to move in with the parents in your 30s? Just a sensible economic plan! High gas prices? A chance to get more exercise! Lucky for us, this stuff is only a crisis when a Republican is in charge.

    • Not a huge fan of this article. Parents who live close to areas that have good jobs give their kids an advantage by letting them live with them for awhile. Those kids can save up good down payments, while the rest of us have to earn a living and pay for rent AND save for a down payment. It seems rather unfair to me and pushes housing costs up. I suppose you can’t do much about it though.

    • As a mom of adult children, I have to say that the adult children moving back in is not a good thing, for them or for us (the parents). The darling munchkins have been a steady drain on our resources their entire lives. It now appears that I will have to work until I fall over dead to provide for the deadbeats that our children have become. Our fault really, we gave them too much and expected too little. I guess you really do reap what you sow. Most of our kids nowadays are prime examples of arrested development, many of them do not grow up until their late 30′s or 40′s and all too many never grow up at all. Perpetual teenagers…they eat, drink, make messes and rarely,if ever help out with cleanup or the bills. Most of them are more useless than teats on a toad.

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