Living at home with parents while figuring out a financial exit plan
Nicole Solero moved out of her parents’ home in Orlando, Florida, after she graduated from a community college in 2019. She worked as a freelance graphic designer in a small town in South Florida, but she felt lonely and depressed working remotely while her roommate frequently traveled for work. Solero decided to move back in with her parents.
The financial decision made sense to Solero, who said adult children living at home with their parents wasn’t really a source of stigma in her Hispanic culture. “We stay home until we are stable enough to move out,” she said, “and usually it’s until you’re married or until you have a career where you can provide for yourself completely.”
Solero, 24, now lives with her parents and her brother while she works as an intern at a public relations agency. She also does some freelance work. She helps her parents by occasionally paying for household expenses like food or laundry detergent, but she is able to save around $600 a month by living rent-free. She plans on moving out in the next two years, she said, after she secures a job.
Young adults are often encouraged to leave the nest as a rite of passage to establish financial independence and build a life and career away from their parents. But for some members of Generation Z and younger millennials, factors like the high cost of living, student debt, family obligations or cultural traditions keep them living at home for longer than expected. The pandemic and its resulting economic downturn also forced many young adults to move back in with their parents.
According to a Pew Research Center analysis using Census Bureau data, half of Americans
ages 18 to 29 were living with their parents in July. And although more than one-third of Americans in a survey that the center conducted in October 2021 said it was bad for society for young adults to live with their parents, many young people said it was necessary to get closer to achieving their personal and financial goals.
Tim Morris, 23, graduated from college in 2021 with about $53,000 in student debt. He decided to move back in with his parents in Akron, Ohio, and has managed to reduce that debt to
around $24,000. Morris describes his living situation like living with roommates who “pay for everything.” Besides his bills, he needs to worry only about paying for gas.
“It is not what I want, but I am putting up with it because it is helping me put a big dent in my loans,” Morris said.
One of the main challenges that come with living at home for Morris is the toll it has taken on his dating and social life. Both of his parents are retired, and he has to ask for permission to have friends over. Morris said he had
been on few dates since moving back home, partly because he did not have his own space.
“It’s not that enticing to just date someone who still lives with their parents,” he said.
Morris still owes about $8,000 in private student loans and hopes to move out when he pays them off. He is aiming to reach this goal by the end of September.
When young people have student loans, hope to start a business or want to save up for things like a house or a wedding, living at home can be a good financial decision, said Jovan
Johnson, a co-owner of Piece of Wealth Planning, a financial advisory firm. In terms of when to move out, Johnson said, it is important to make sure you have enough income to afford rent and your lifestyle as well as an emergency fund that includes three to six months of rent and basic expenses. He also stressed the importance of being emotionally prepared for that next step.
“Make sure you’re ready for that independence and what comes with it,” he said. “It is a little different when you’re on your own without that support.”