I’m a 28 year old millennial and I moved back home with my parents last month.
Now before you call me a mooch, or a freeloader, let me explain something…I’m not the only one doing this.
Millennials are living at home way longer than any other generation.
In fact, 22% of people age 23 to 37 live with their parents. A jump from 11.7% just 2 decades earlier.
Crazy right! But why are so many living at home?
The problem is that buying a house is expensive.
According to a CBS News article, which compared median home prices to median income across the country, homes are unaffordable in more than 70% of America.
Which explains why so many young people are moving back home….they can’t afford a house!
So don’t get me wrong, I’m not particularly proud of moving back in with my parents, but when a quarter of my peers are doing the same thing, I feel a little less embarrassment.
Also, you should know that just because our generation is choosing to stay at home longer doesn’t mean we are lazy. I think many people have the image of a grown man, not wanting to get a full time job, sitting on the couch eating potato chips while mommy and daddy cater to them. From my experience, this is not the case at all.
I, for one, have a great job as a public school teacher, and I do well with my side hustle giving private music lessons after school. I consider myself extremely independent and self sufficient.
In fact, I rented an apartment for the past few years.
I don’t by any means have to move back home with my parents. It’s simply a choice I made.
So you might be wondering….why did I choose to move back home?
Simple…
Living At Home Saves Me A lot Of Money
I experienced both living at home and renting in my twenties.
Living at home years
From age 22 to 25 I lived at home, bouncing around different substitute teaching jobs before landing a full time job as a music teacher. With very little expenses during this time, I was able to focus the majority of my income toward paying off my undergraduate student loans. In fact, I was able to pay off all 45k in loans in 2 years. Way faster than any of my friends who chose to move out after college.
I credit my ability to pay off my loans so fast to a few things.
One, I was frugal. I realized the opportunity I had living at home, and I didn’t waste it by spending my money on things like beer, fancy cars, expensive vacations. Okay, maybe a little spending on beer.
Two, I was hustling to make money. I was a substitute teacher during the day, and taught private music lessons in the afternoons. Having a 10 hour day was normal for me.
Third, and most important, I had no rent or mortgage. My parents were great and didn’t charge me to stay with them after college. Also, they didn’t charge me to eat with them either. Free lodging and free home cooked meals for the win!
Then, once I was debt free, I did what any 25 year old who just paid off their loans would do.
I moved out of my parents house and rented my own an apartment.
Renting years
From age 25 to 28, I paid $1300 (+ utilities) per month to rent an apartment in a HCOL area on Long Island, NY.
As a semi mature adult now, I was paying for rent, utilities, and groceries. So naturally, my expenses went WAY up.
Also during this time, I got my masters degree in Educational Leadership. Putting me back into 30k of graduate student loan debt.
As you would imagine, I was unable to pay off this debt as quickly as before. When I was living at home, I was able to put $2k/month toward my debt. Now with all of my expenses, I was only paying about $500/month toward debt.
Present day
When you take into account living expenses and food expenses, I calculated that I save more than $1500/month by living at home.
Yes, as a grown ass man, I understand how it looks to be living at home. Trust me, I would MUCH rather be in my own apartment.
But…the savings is just too great.
So, I’m currently 28 years old about to turn 29. I have about 15k left on my masters student loan debt, and last month I did not renew the lease on my apartment. I moved back home. My plan is to stay home for a year or less, pay off the remainder of my debt, and then finally move out for good.
Living With Your Parents Until Age 30
I started to think, what if a 20-something year old never rents or buys a house and stays at home until age 30. What if instead of paying rent/mortgage, they invested $1k a month in an index fund. What would there financial situation look like?
After playing with some numbers I found some interesting findings.
Assumptions
- You live at home from age 22 to age 30
- Your parents aren’t charging you any rent
- Instead of paying 1k+ a month toward rent/mortgage, you invest 1k/month in an index fund
- 7% annual return
Findings
A person in their 20’s that stays home and invests will have $132k by age 30.
If they never invested another dollar again after age 30 (8 years of investing), they would still have $500k by age 50.
If they continued to invest $1k a month until age 50 (28 years of investing), they would have well over $1 million.
If they used that money for rent during their 20’s and started investing $1k/month from age 30 to 50 (20 years), they would only have $500k.
The Bottom Line
There was a time when living with your parents through your 20’s and into your 30’s was frowned upon.
Now, it’s more common than ever, and it may actually be a wise financial decision.
If you have a good relationship with your parents and they are willing to have you stay, you may want to consider sticking it out.
