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Can moving back home after college be a potential trap for your career? When, if ever, might be the right time to go back to your hometown? Let’s break it all down. For a moment, try to set aside what you know (or think you know) about people who move back home after college, or return home after a few years. Let’s turn to real data and studies over the past decade to get a sense of what moving back home does to graduates financially, psychologically, and socially.

19% of all college graduates move back in with their parents. As a college senior, the main goals in mind are as follows:

1. Have a job lined up and ready to go
2. Find a place to live
3. DON’T go back home!

 

Are you cringing yet? How many of us actually fulfilled all these, after drowning ourselves on senior theses, completing our degree hours, and blindly attending recruiting events with no success? The social anxiety of returning to Hometown, USA shouldn’t overrule common sense. Without a job lined up, without savings in the bank, and without a first paycheck, it’s hard to put down your first month’s rent and a security deposit fresh out of college.

The main issue for student graduates is student loan debt. 44 million borrowers collectively owe $1.5 trillion in student loan debt, which is the second-highest consumer debt category behind mortgage debt. It’s estimated that 40% of student loan borrowers may default on their debt by 2023.

• A survey of over 20,000 young adults from TD Ameritrade says that 50% of millennial and Gen Z youth plan to move back home after college.
• In 1980, one out of ten college graduates moved back home.
• Now, four out of ten college graduates move back home.

 

According to a Pew Research Center report, 19% of college graduates actually move back in with their parents upon graduating. New jobs often only offer entry-level salaries, and moving home is a reasonable way to make ends meet. You can save up for an eventual move-out, as well as make a dent in student loan debt or credit debt. In fact, the largest portion of monthly income after college will go towards covering housing expenses.

Success for adult children who move back home can vary on the relationship between the child and parent, the financial opportunities granted by parents, and the location of hometown. Parents who are able to give more are also based higher on the socioeconomic ladder than parents who can only provide free rent. This can mean parents who give money to their children may also be able to provide better networking and professional opportunities to their children.

For graduates not living at home, there is still a large portion receiving financial aid from their parents in the years after graduation. According to a 2015 Pew study, 61% of parents still pay for their 25-36-year-old kids’ cell phone bills or special circumstances when they arise.

On the flip side of living at home, Dr. Anna Manzoni, a sociologist at NC State University, found that young adults who are given financial help instead of living rent-free at home do better professionally. Parents who offered money did especially well professionally, compared to their counterparts who stayed at home. Compared to graduates living independently and who are financially independent, graduates who received $15,000 or more did best, with 6 points higher on their occupational status, versus graduates living with parents rent-free, who ranked 10 points lower.

 

Moving back home, fresh out of college: What’s it actually like?

The thought of moving back home after graduating college sounds like, “Welcome back to rules, curfew, and restrictions.” Adjusting back to living with younger siblings and parents can be a daily struggle. Living with family on college holiday visits may have always been fun and easy, but suddenly you’re not the special guest anymore. Daily routines take precedent; real family issues might come back to the forefront. Your childhood home can feel smaller and you might feel out of place in the family dynamics. 18-24 years old can be an odd age in the family, regardless of whether you move back home. Are you an adult? Are you still regarded as a kid? It can be a weird in-between to adjust to, especially when you aren’t fully financially independent.

Studies have shown psychological distress in graduates that move back home, where they have feelings of guilt, low self-esteem, and significant stress. This can cause depression and irritability, as graduates face anxiety about their future, while experiencing an adjustment period of moving back into a childhood home. Some may not adjust well back into the lack of privacy as parental boundaries are reinforced, and graduates may feel trapped, socially regressed, and no longer understand the role in the family. A report from the London School of Economics found that parents’ quality of life also took a hit when their adult children moved back.

Financially, those who move back home face the challenge of saving money to become independent, while also contributing to the family expenses and expectations. Moving back home shouldn’t be a permanent residence. The more responsibility you’re able to take on while living at home, the easier your adjustment will be when you move out. Setting and living on a budget while at home and avoiding financial help from your parents are the most sustainable ways to ensure success after moving out of your family home.

What are some other solutions?

1. Engage in family discussions about finances early on, and keep a family expense budget.
2. Meet with a financial advisor early on about saving for college, loan options, and the best way to finance your or your child’s education.
3. Explore non-financial and financial ways for adult children to contribute (e.g. providing care for younger siblings, driving, shopping, doing chores, making home repairs, paying a subsidized rent, etc.)
4. Have career flexibility—money is money at the end of the day, and not everyone lands their dream job right out of college. While you shouldn’t settle for the rest of your life with a job that isn’t what you wanted, don’t be afraid to explore other options in fields you may not have considered before, or seek out internships and entry-level work to get a foot in the door.
5. For parents who are able to give money to their children, consider implementing conditions alongside the money to prevent financial dependency. Having timelines and expectations can prevent both parties from developing feelings of resentment and stunted financial growth.
6. For parents, siblings, and adult children who move home: Provide emotional support to one another—the emotional and economic stress on everyone involved is very real. Be supportive and understanding of one another, keep communication open, and the entire process will become much more manageable for the whole family.

 

Thinking of moving back home? Don’t be so hard on yourself

60% of people returning within a year after leaving their hometown see it less as a personal failure, and more-so as a failure to their family and friends. People who moved back home have described it as “embarrassing” or “impossible” to go back home due to ties with their hometowns, or the understanding that they may have to take a financial cut to move back.

Moving back home is a great opportunity to see your hometown in a new way. If you’ve been at college for four years, the chances are that you are a different person, and there are new experiences as a young adult you can now have in your hometown that you didn’t before. College tends to make young adults more self-reliant, disciplined, and adjusted.

 

What’s the “brain drain” affecting small communities?

The common narrative with small, rural towns is that if you’re smart, ambitious, but most importantly, if you have the means, you should leave your hometown. This, in turn, creates a “brain drain” on the small communities, whose college graduates don’t return home. How true is this?

Speaking from data, this is actually happening all across America. New research from the Federal Reserve has shown that adults with the highest student loan balances are most likely to migrate to cities. What many graduates don’t consider is that cities are overcrowded, highly competitive, and are facing massive housing crises.

Comparatively, according to Goldman Sachs, cumulative job growth since 2009 has increased by 14% in cities, compared with 2.7% in rural areas. Employees with college degrees in big cities earn about $71,000, versus if they remain in a rural area, they earn about $50,000. It’s also important to consider the costs of living in both areas compared to annual income.

When it comes to paying down student debt, college graduates with better financial outcomes (i.e. those who moved to cities) are more likely to pay down loans and become homeowners. This has caused increasing gaps in job markets, political divisions, and overall opportunities between rural and city areas.

 

Want to know the truth that most don’t realize? Most people return home or move closer to home eventually, anyways

• Within 2 to 4 months of starting a new job in a city outside of your hometown, the “honeymoon” phase begins to wear off, and the first thoughts of moving back home emerge.
• 80% of adults, males and females, ages ranging from 15-35 years old end up going back to the hometown after having lived elsewhere for a period of time.
• The #1 reason people move back home is to be close to family, and 90% of those who move back still have parents and siblings in town.

After age 35 is when many people move back to take care of family and relatives. But, taking care of aging relatives definitely isn’t the biggest trend right now. In fact, what studies over the past three decades have found is that there is a clear trend of young people moving to new cities reversing once they hit the stage of beginning a family, they decide to return home. The majority of people actually move back home to receive help raising their kids. In turn, parents also move to wherever their children are to help raise grandchildren.

What’s the benefit of moving home, at any point in your life?

• Opportunity for your children to experience a similar childhood like yours.
• Close emotional ties and a support network of family and friends.
• Ability to better know your neighbors and teachers.
• Greater community involvement opportunities.
• Development and skill contribution to more rural areas.

On a survey done on older Americans, it was found that on average, the majority of people only live 18 miles from where they grew up. This might stand in stark contrast to the American ideal of being restless, migratory people who seek new frontiers. Only 20% of Americans live more than a few hours’ drive from their parents.

 

T-N-T Moving Systems is here for your next step

Whether you need assistance moving from a college dorm into your first city apartment or moving back into your childhood home, you can count on T-N-T Moving Systems to be there for your next big move.

 

-Tayler Green