Post-Grad Life: Why Millennials are Still Living at Home
December 6, 2019
More and more, millennials are moving back home after completing their degrees. A survey conducted by TD Ameritrade reports 50% of millennials plan to move back home with their parents following college. But why is this? How is it that the start of independence becomes short-lived for some?
Post-grads seem to be making different decisions than their predecessors and we’re on a hunt to find out why.
Let’s talk about money management
Investopedia describes financial literacy as “the education and understanding of various financial areas including topics related to managing personal finance, money, and investing.” While most schools tend to have courses on consumer economics or subjects concerning the U.S. economy, financial literacy may not be the main goal, objective, or subject that is thoroughly discussed.
Personal finance is just that––personal. It’s quite possible that financial literacy is just scratching the surface of the problem given that knowledge of financial literacy or schooling concerning financial topics might leave some confused when it comes to their individual financial situation. A Bank of America survey reports 54% of millennials are “somewhat optimistic about their financial future”––an illustration of millennials feeling lukewarm when it comes to their money.
Cost of living
For some, perhaps, living or moving back home could be a strategic choice to save money and work to get ahold of their financial knowledge. ValuePenguin suggests the Great Recession is to blame for the return of multi-generational living, citing multigenerational living as an economically advantageous decision.
The Great Recession refers to the years between 2007 and 2009 where the housing market crashed and unemployment rose. For millennials, as described by Business Insider, the largest scar from this period was how difficult it became for millennials to accumulate wealth because of lower wages, a difficult job market, and student loan debt. It’s no wonder millennials increasingly decided to move in with their parents when the cost of living became difficult to keep up with.
Over time, the cost of living has risen incrementally each year. In tandem with this, the value of the dollar has inflated, decreasing its buying power.
Millennial’s and their relationship with spending
With the youngest bracket of millennials now reaching college graduation (if they followed a traditional educational path), some trends are finding those of the millennial generation to differ from those of previous generations. In terms of housing, some evidence shows a “lag in homeownership”. Even more, 68% of millennials that do buy homes report in the same survey to feel buyer’s remorse because of overspending on their down payment, underestimating maintenance costs, or settling on a home that didn’t exactly match up to their needs.
Adulthood and graduating from college are major milestones associated with moving away from home. More and more millennials seem to be making decisions that belie this traditional pathway. The exact answer why isn’t necessarily transparent as financial matters are individual. Perhaps they want to make room for their future financial successes by saving on living expenses? Maybe they’re hoping to make more time to figure out how they want to make money and what exactly they’d like to do with it?
Whatever their individual reason, millennials living at home seems to be a trend. Research points to the rising cost of living and hopes to make more financially savvy decisions for their future—this, after enduring the great recession.
Looking for more ways to reach your personal finance goals?
Then this blog post is for you! Take a look at our tips for staying on top of your assets and keeping you in the driver’s seat of your finances.
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