According to recent statistics, 40% of the Millennial Generation live at home with their parents. Millennials are those born between 1980 and 2000, and if this statistic is accurate, it means that more young people are back at home than at any time since the Great Depression of the 1930s.
Some of the generation never left home, some lived away at college then returned home, while others lived on their own for at a time, but returned to the nest afterward.
There are various reasons for this phenomenon, the economy being central, but the decision to stay at home – or return to it – should never be taken lightly. There are good reasons to come home, but there are also a few that are less than healthy.
A crushing student loan burden
Student loan debt has become the “new normal” for college students in recent years. For many students and graduates, the loan burden is the size of a small (and sometimes not so small) mortgage. Worse, the loans are unsecured (no asset to sell to make them go away) and generally non-dischargeable in bankruptcy. If you have one, you’re very nearly stuck.
That makes a compelling case for throwing everything you have at the debt to get it paid off as soon as possible. Unless you will be earning an income that is substantially above average, there will be little you can do in life if you are carrying a student loan burden of $50,000 or more.
Moving back home on a temporary basis until the debt is at least mostly paid off is an excellent strategy. Just make sure that the arrangement is temporary and that all the savings you enjoy are directed toward the payment of the debt.
Unable to land a living wage job/prolonged unemployment
Even with a freshly minted college degree, it can be difficult to land a well-paying job without previous experience. That’s a dilemma many young people are dealing with right now. Many are unemployed, working part-time jobs in unrelated fields, and some have even experienced an early career crisis, losing a job after only a couple of years.
If living wage jobs in your career field are few and far between, or if you’ve been out of work for a long time, it may be time to go back home. But the return should be viewed as an opportunity to regroup, and never as a time to sit back and coast.
This is one of the most common reasons young people return home. Divorce is not at all uncommon among 20-somethings, and it has great potential to disrupt your entire financial well-being. This is especially true if you have a child or two, or if the divorce occurs at the same time as a career crisis. It may be necessary to return home until some sense of normalcy and financial stability is achieved. And once you have it, it’s time to strike out on your own again.
This is probably the best reason to return home. Not only will you need a financial break, but you may need the tender loving care that can only be found at home with your family. When you return to health, you can take another stab at independent living.
And some reasons why moving back home isn’t a good idea
We’ve covered legitimate reasons to move back home after graduation, but there are some reasons that aren’t nearly as holy.
To improve your finances. This one is a bit of a gray zone. On the surface, it sounds like a winning strategy, but it may also mask a lack of willingness to face adult responsibilities. Your financial situation will rise and fall over the course of your life, and you won’t always have the benefit of returning home when things get tight. Learning to deal with this when you are young is a lesson you can’t afford to miss.
To accommodate lower ambitions. There’s no doubt that a lot of young people – especially recent college graduates – are sensing that opportunity is slimming down and it may be necessary to lower expectations. It’s fine to cut spending to survive tough times, but it’s also important to push forward against the odds. Living on your own will force that upon you. Living at home may weaken that drive. And once gone, it may not come back.
To lead the good life for a while. Under the guise of a tough economy, there may be a temptation to move back home to live the good life. I’ve seen it, and I’ll bet you have too. A capable young man or woman moves back home, buys a new car, travels the world, eats in expensive restaurants, and hits the bars more than a couple of nights a week. What’s so destructive about this kind of move is that it sets a pattern that once established is difficult to overcome. It’s moving home to live a certain lifestyle, not to improve your life.
An open-ended arrangement. Any arrangement that sees you returning home with no exit strategy is a bad idea. The one exception: returning home to care for a sick or disabled family member. Any other purpose is likely to breed the kind of complacency that can stunt your life.
Under the right circumstances, returning home after graduation can be the right thing to do. But the wrong motive could interfere with your transition into adulthood. This is a time to learn, to grow, and to be challenged.
Can you think of other times when moving back home is the right thing to do? Or some other times when it isn’t?