Reevaluating the Wisdom of Returning Home: A Strategic Financial Move
Periodically, I revisit and refresh timeless financial advice, emphasizing strategies that stand the test of time. This article originally appeared on April 30, 2005, but its core insights remain highly relevant today.
The True Meaning of “Home”: More Than Just a Place to Stay
Robert Frost eloquently captured the essence of home in his poem “The Death of the Hired Man,” suggesting that home is where “they have to take you in.” However, what Frost didn’t explore is that returning to your family’s residence can often be one of the most astute financial decisions you can make.
Living at Home: A Growing Trend Among Young Adults
In recent years, the phenomenon of young adults moving back in with their parents has gained significant traction. According to Pew Research Center data from 2023, approximately 18% of individuals aged 25 to 34 are residing with their parents. This trend prompts a critical question: Does living with your parents as a young adult imply financial failure?
Financial Benefits of Moving Back in with Family
When my own three adult children returned home after college, my husband and I established a simple agreement: no rent payments, but every dollar they would have spent on housing was redirected into savings for their future. I’ve previously shared this approach in a column, highlighting its advantages.
Addressing Common Criticisms
Predictably, this arrangement drew criticism. One commenter on a parenting forum dismissed it, claiming, “She says they’re saving for retirement-ridiculous. She’s lost credibility.” Another argued, “It contradicts her advice about fostering independence.”
Yet, many parents recognized the logic behind it. One remarked, “She’s allowing them to save money by living at home, and she plans to introduce rent if they’re not managing their finances well. It’s a smart setup.”
Success Stories: Turning Living at Home into a Financial Launchpad
Our daughters pooled their savings and purchased a home together last year-an achievement that would have been challenging if they had been paying rent, which can sometimes equal or surpass a mortgage payment. Meanwhile, our son is using his rent-free period to pursue additional education in accounting.
Living with Family Doesn’t Signal Failure
Residing with parents doesn’t equate to a lack of independence. Instead, it can serve as a strategic step to build financial momentum before venturing out on your own.
Historical Context and Literature on the Subject
This approach isn’t new. To illustrate, I’m revisiting a classic book, “Boomerang Nation: How to Survive Living With Your Parents … the Second Time Around” by Elina Furman. Her insights have become even more relevant in today’s economic climate than I initially realized.
Personal Experiences and Broader Trends
Furman’s own story mirrors this trend. After college, she moved back in with her mother and sister, remaining there throughout her twenties. She notes, “With no job and no desire to work at a coffee shop, I returned to my family home. As the hurdles of achieving independence-housing, employment, education-become more daunting, many of us choose to turn back rather than push forward.”
Understanding the Psychological and Practical Aspects
Furman’s book aims to dispel the stigma associated with living at home. It offers a blend of emotional support and practical financial advice, addressing issues like guilt, dating while living with parents, and maintaining a sense of independence. Her use of personal stories and checklists, such as “Top 10 Things to Do Before Boomeranging,” provides actionable guidance.
When Is Returning Home a Wise Choice?
Furman suggests that returning home might be advisable if it helps you:
- Save for a down payment on a house
- Pay off student loans or other debts
- Transition into a new career or educational pursuit
Handling the Social Stigma and Practical Challenges
One of the most delicate issues is explaining your living situation to potential romantic interests. Furman humorously advises that, despite statistics and economic realities, saying “I live with my parents” can be awkward, especially when dating. She emphasizes honesty combined with confidence.
Financial Discipline During the Stay
Many individuals move back home intending to save, but without the responsibilities of rent and utilities, discretionary spending can spiral out of control. Furman highlights the importance of maintaining discipline to maximize the financial benefits of this period.
Maximizing the Opportunity for Financial Growth
Once you decide to return to the nest, it’s crucial to use this time wisely. It’s arguably the best period to address financial goals without the immediate pressures of independent living.
Final Thoughts: Embracing the Return as a Strategic Step
Whether driven by economic necessity or strategic planning, returning home can be a powerful tool for building financial stability. Furman’s book offers candid, humorous, and practical advice for navigating this phase successfully.
Join the Conversation
While we don’t hold in-person or online meetings for the book club, I invite you to share your thoughts on these topics. Email your feedback to [email protected] with the subject line “Color of Money Book Club.” Your insights may be featured in my weekly newsletter. Subscribe at wapo.st/comperfinewsletter.
