Times are tough for many Americans: inflation continues to wreak havoc, and housing costs remain high. For younger Americans just graduating college or still in their early professional years, the clear choice seems to be to live at home.
55% Of Adult Children Receive Financial Support
A new report on empty nesters (or would-be empty nesters) by Retirement Investments shows that 55% of Americans with adult children help them financially, and 2 in 5 still have adult children living at home.
- 60% don’t think their adult children will be financially independent in 2023
- 1 in 5 have sacrificed retirement savings to aid their children
- 41% expected their child to move out by now
Those who become empty nesters often find financial relief: nearly 3 in 5 become less financially stressed once their children leave, and 3 in 4 enjoy being empty nesters.
Time Are Hard
Allison Hadley, a spokesperson from Retirement Investments, says, “Times are hard: inflation continues to affect Americans, and those who are just starting their adult lives don’t have as many resources to adjust to increased prices. With 54% of parents cohabitating with adult children citing high housing costs as the reasons their kids are still living at home, empty nesting is a bit more of a reach. While many expected kids to move out at 23, now the more ‘realistic’ age, according to these parents, is 27. This can have a huge effect: moving, vacation trips, home improvement, and even retirement itself are being put off to help support children nearly a decade past 18.”
Is Living at Home the Answer?
Mike Hunsberger, ChFC, says, “Gen Zers who find themselves unable to make ends meet should first assess where their money is going. They should ruthlessly cut out any expenses they can until their income and expenses are balanced. This is critical because the last thing you want is to get into debt spiral with credits cards. If that’s started it’s imperative that they stop it with credit card interest rates at all-time highs. Once they’ve stopped accumulating more debt, they should build a realistic budget”.
Parental involvement may be the key to helping Gen Z get on the right track, “If their parents are in a position to help,” says Hunsberger, I would want to ensure the Gen Zer is on a sustainable path and had a plan to avoid getting into this situation in the future. If the parents aren’t able to help, the Gen Zer will need to either find a way to increase their income or continue to reduce their expenses.
Many parents and children agree with Hunsberger; a whopping 48% of Gen Z say they’re unable to move out of their parent’s home due to financial struggles.
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This post originally appeared on A Dime Saved.