For the first time since at least the Great Depression, the majority of adults under 30 are living with their parents. It’s a trend that has been on the rise since the 1960s, but the Great Recession and now the coronavirus pandemic have accelerated it.
Even though the living arrangement is more commonplace, young adults may still worry they are behind.
“Most people want financial independence,” said Bobbi Rebell, a certified financial planner and personal finance expert at Tally, an app that helps you pay down debt. “The natural instinct is to not be dependent on parents forever.”
Whether a job loss from the pandemic or closed college campuses have brought parent and adult child together, there are ways to plan for a relaunch and keep the peace, Rebell said. Here’s what to know.
What’s your exit strategy?
Have an exit strategy, Rebell said. That will look different depending on your financial situation and the circumstances for your adult child.
If your college child is back home, which happened for Rebell when her 20-year-old stepson was forced back in the spring when his college closed dorms, the plan is what’s next. The reopening policy at your child’s school obviously plays a major role.
“We thought this was very temporary, that they all would go back after spring break,” Rebell said. “Retroactively, how naive we all were.”
Her stepson’s college remains remote, but he’s not staying home. It had already been planned before the pandemic struck that Rebell’s stepson would live off-campus. The family had saved for that and decided he could live with friends off-campus, as planned, but in a pod, doing remote learning,
“You have to have trust in your child not exposing themselves,” she said. But the move made more sense, because at home, her stepson had to share a bedroom with his younger brother.
She realizes this solution isn’t necessarily affordable for everyone, so their exit strategy may look different.
Good reasons to move back
Rebell’s 23-year-old step-daughter is also living at home. She still remains employed, but is saving money to buy her own home.
“Even pre-COVID, there had been a trend of more young people living at home,” Rebell said. “Sometimes for good reason, to save up to buy a home or pay down student loans.”
But she reminds parents that just because their children at home doesn’t mean they’re not adults.
“When adult children move home, they enjoy the perks of childhood,” she said, noting meals are prepared, laundry folded, bathroom cleaned. But that shouldn't be the case.
“That takes time and money from your parents,” she said.
Adult children may not need to pay rent, but they should be productive members of the household. They should not only make dinner more than once a week, they should also buy the groceries to prepare it. Same thing with cleaning and buying supplies.
While at home
It’s important to do things to be ready to move out, even if you’re not moving out for a while, Rebell said.
“This is the time to buckle down and know what your finances are,” she said.
Earn and save more: With fewer living expenses, you can double down on saving. If you lost your job and haven’t found something new, reassess what skills you have that can make money. For instance, her stepson who coaches fencing is now teaching fencing virtually.
Improve your credit: Pay down high-interest credit card debt that is hurting your score. Set any bills to be automatically paid.
When it’s time to move: You have time to make careful decisions. In many areas, more renters are moving out than moving in, so you have more choices. Even if you lose out on a great apartment, a better one could be waiting.
Set yourself up for the long term. Because so many apartments are available, landlords are likely to lower the rent if you choose a longer lease. This allows you to lock in a price, so you’ll have a better idea of what your future budget will look like.
Read more information and tips in our Family section