The Census Bureau recently released data showing that a third of young adults aged 18 to 34 are either living at home with their parents or in college dorms. Even more surprising, a quarter of 25- to 34-year-olds who live at home aren’t going to school and don’t have jobs.
Think this is a symptom of an entitled generation living in the lap of luxury? Think again.
Why some young adults can’t leave the nest
The answer to why so many young people are living at home doesn’t come in a neat package. Rather, it’s likely due to a conglomeration of factors that have been affecting millennials for years. Here are a few to consider:
- Difficulty finding full-time employment
- Lower wages than previous generations
- The steady rise of student loan debt
- Student loan servicers that don’t work in students’ best interests
When you combine fewer job opportunities and lower wages with the ever-increasing burden of high student loan payments and servicers that don’t always apply them in ways that best benefit borrowers, you end up with a recipe for disaster.
It’s no wonder that a third of young adults are still living at home. The question is, how can the millennials living at home plot a plan to leave the nest faster?
What to do if you’re stuck living at home
For those living at home who aren’t in school and can’t find full-time work, side hustles might be their best chance at leaving the nest.
In many parts of the country, the availability of work depends on the local economy a great deal more than your own qualifications. With a side hustle that’s online, you open yourself up for much more opportunity.
While side gigs don’t provide much-needed health insurance, 401(k) plans, or a full-time salary, they do offer a way to earn an income on your terms.
With a side hustle, you can work multiple jobs to gain the equivalent of a full-time salary. If you haven’t yet finished your degree due to finances, you could work a side hustle and go to school part-time. Even a small income can help offset some of the student loan debt you take out.
If the high cost of your student loan debt is the reason you can’t afford to move out, look for ways to lower your payments. One great way to do this is through income-driven repayment plans, but federal loans also come with deferment and forbearance options.
If you have private loans, contact your lender to see if they offer unemployment protection or other options for economic hardship. If your current lender is unable to help you, refinancing your debt with a new company could offer you more desirable loan terms.
For those stuck living at home, the change must start with them
The picture looks bleak for many millennials; this generation will have to rely more on creative solutions and resilience to reach their financial goals.
For better or worse, your financial success depends on you. Take control and save as much money as you can while living at home. Earn money with side gigs until you can find full-time employment or save enough to move to a city that has more work in your field.
Most importantly, know your student loan options when times get tough to avoid defaulting on your debt.
Follow these steps and you can make sure your situation today isn’t the same as your situation five years from now.
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