Our society is experiencing a generational shift. For centuries, families never separated at all and lived in large communities together. As different communities interacted, community members left for marriage or other reasons.
For most of the modern era, it was common for unwed children to live at home until a marriage was arranged. However, this was a time when the layperson often took on their parent’s trade and affluent children inherited a home.
In the most recent century, occupation and home were not automatically inherited. Young men and women choose what they want to do for a living and where they want to live. As these independent choices became the norm, so did the expectation of these same people to strike out on their own.
However, when we compare to the 1950s, the dollar is valued 1200% less today than it was 70 years ago. That being said, the average home cost less than $8,000 in 1950 while the average home costs $260,000 in 2020 (before the pandemic drove prices even higher). So, with 1200% less buying power, you need to buy a house 3250% marked up.
Let me be clear, nowhere in this article will I support living with your parents without contributing. This article is not discussing how to look for a free ride. It is, however, going to point out the benefits of living in your parent’s home and staying a contributing member to living expenses.
Table of Contents
Reasons to Live at Your Parent’s Home
1. They Can Pass on Generational Wealth
Generational wealth is the greatest way for a parent to improve the life of a child. In fact, isn’t that every parent’s wish for their children to be better off than themselves? As parents, we have years of experience, connections, and savings on our side.
We may not all be able to connect our child with her dream job or a lump sum of money, but we can help them grow financially. One of the easiest things a parent can give is a chance to save.
This does not mean you live with your parents without a job. Navigating the job and housing market with a strong safety net gives you the chance to take more risks and explore. You will also start your career without all the added expenses of home ownership.
2. It is an Unpredictable Job Market
As it stands right now, the job market is incredibly volatile. Many businesses found navigating the pandemic to be too costly. According to the Bureau of Labor and Statistics, in July 2020, 9.7 million individuals were out of work because of the pandemic.
Surviving those rough seas had a lot to do with luck and good planning. Many became jobless almost overnight. With so much turmoil, the job market has not recovered. It will take significant time before the job market reaches stability.
Living with your parents protects all of you in these uncertain times. You can lean on each other if anyone runs into a tough spot.
3. It is an Unpredictable Housing Market
The pandemic has created a housing market unlike any we have ever seen. Houses are marked up so high that many cannot even afford a home. Furthermore, the ones they can afford are well below the traditional buying power.
Not only do you need a large amount of capital and a good bank, but you also need a chance to purchase the home. Many homes are receiving upwards of 10 offers after 24 hours on the market, most are sight-unseen.
While the market is finally cooling off after 2+ years of intense growth, it will still take some time before it returns even close to equilibrium. Waiting it out with your parents may protect you the best in the long run. After all, no one wants to be upside down on a house and housing values will not hold at these lofty numbers forever.
4. You Can Build Credit
Credit is not something that appears automatically when you turn 18. Unless you have a significant amount of capital to back you up, your buying power will be limited (especially in the housing market).
Living with your parents allows you to build your credit with smaller loans and credit card usage. These loans can lead to larger loans like auto loans. Showing proper payment of these loans will increase your credit quickly.
Mortgage lenders assess all these things before providing a mortgage. Taking the time to focus on your credit will give you a great opportunity to foothold when you are ready to purchase your own home.
5. You Can Grow Your Savings
There is no question that living with your parents will lead to lower living expenses. That being said, you have the chance to grow your savings. No matter what your goals are for your savings, this gives you the biggest jumpstart.
You will have the chance to build your emergency fund. Moreover, you can grow a large enough sum for a down payment when you are ready to purchase a home.
Need to save money fast? Here is how to save $5000 in 3 months.
In the end, it makes no difference what you are saving for, just that you will get the best chance of living with your parents.
6. You Can Invest in Your Future
The number one lesson that is now being taught to young adults is investing in their future (namely, retirement) in their 20s is the best financial decision you can make. While living with your parents, you can focus on this without fear of losing out on other things.
With limited living expenses, you can max out your 401K investment and any other retirement account you own. Though you will not reap the benefits of this financial decision for many years to come, you will not regret it once when it comes time for retirement.
Roommates are great. In the situation of working in your career and living with your parents, you can view your parents like a roommate. With that, you will need to share responsibilities for housing expenses and maintenance.
However, you also get the benefit of sharing housing responsibilities with your parents. Chores like cleaning dishes, dusting, and grocery shopping can all be split and shared. This takes both the physical and mental load off everyone. You are also available to help your parents if they need help.
Finally, you can contribute to a portion of the housing expenses. You will not only learn how much those expenses cost but also can help your parents. Heating, electrical, and water are all necessary bills of life.
8. You Are Never Alone
As we approach post-pandemic life, one of the greatest benefits of living with your parents is the social benefits. Like any roommate, you have someone waiting at home for you every day. These people are your biggest supporters and care deeply about your well-being.
It will depend on how large your social circle is or your general interests, but you will always have them there. Loneliness can have catastrophic effects on the body, both mentally and physically.
All in all, though there is some societal stigma about staying in your parent’s home, there are also massive benefits. Though not all, many of them are financial benefits. Other benefits protect your mental and physical state.
Finally, it gives you an added safety net if you choose to leap. Despite the potential stigma, it is hard to turn away from these wonderful benefits.