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Life Events

Places Where Adults Still Live With Their Parents

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Moving out of your parents’ home has long been considered the ultimate rite of passage into full-fledged adulthood.

But today’s young adults are more likely to live in a parent’s household — and to live with their parents for a longer period, according to the Pew Research Center. A range of potential explanations has been offered for this generation’s “failure to launch,” from a desire to prolong adolescence to an aversion to marriage and commitment.

While these factors might play some role, the reality for most adults ages 25 to 40 living with their parents is that they lack the money to move out and establish their own households. Some might be unemployed and looking for work, while some have left the labor force altogether. Other young adults have their own children and live with parents out of a need for child care and support.

MagnifyMoney wanted to find out where U.S. adults are most likely to still be living with their parents, and what factors could be holding them back from leaving the nest.

We surveyed the 50 largest metros in America to identify the largest portion of adults ages 25 to 40 living with their parents along with some other statistics about them. We excluded people in this age group who identified themselves as active students.

Key findings

  • In Riverside, Calif., 28% of adults ages 25 to 40 live with their parents, earning this city the No. 1 spot on our list. High unemployment among these young adults – and for the metro, more generally – appears to be a leading factor.
  • Young adults in Miami, Los Angeles and New York follow, with more than 1 in 4 residents ages 25 to 40 living in their parents’ home.
  • Minneapolis stands at the other end of the spectrum, with fewer than 12% of young adults in this age range living with their parents.
  • Seattle is another city with just under 12% of young adults (ages 25 to 40) living under their parents’ roofs. Then there’s a four-way tie for third place among cities where adults are least likely to live with parents: Denver, Indianapolis, Kansas City, Mo. and Raleigh, N.C. all have 12.3% of these adults living at home.
  • Across the board, about 1 in 4 adults living with their parents have children of their own in the home.
  • Men between the ages of 25 and 40 are more likely to live with their parents in every metro we reviewed (except Austin, Texas).
  • The average unemployment rate for this age group across the 50 metros is 8.6%. That’s more than twice the national unemployment rate of 4% as of January 2019.
  • Nearly 1 in 5 adults who live at home don’t participate in the labor market at all, on average across the 50 metros.
  • Adding together the unemployed and the people who don’t participate in the labor force, only 72% of these adults are currently working while living with parents.

Understanding the metrics

The list is ranked strictly on the percentage of adults aged 25 to 40 who live with their parents. To inform our findings, we also present the following information for this same population (which did not affect rankings). We excluded anyone from the analysis who was identified as a student.

  • Percentage who have their own children at home.
  • Percentage who are unemployed. This refers to people who want to work but are unable to find work. They are part of the active labor force in their communities.
  • Percentage who don’t participate in the labor force. These are people who don’t work outside of the home and are not seeking to work. This is different from the unemployment rate, and people counted in that rate are not included in this metric. We excluded people who are identified as students from our analysis as well, so these statistics don’t include people not looking for work due to educational pursuits.
  • Breakdown of people who live with their parents by sex.

In the 10 cities with the largest shares of young adults ages 25 to 40 living in their parents’ homes, eight were split between two regions: the South and the Northeast. In the South, more adults live with parents in Miami, San Antonio, New Orleans and Orlando, Fla. The four top cities in the Northeast include New York, Philadelphia, Providence, R.I. and Baltimore.

Here are some other highlights of these 10 cities with the highest portions of adults (ages 25 to 40) living with parents:

  • San Antonio, Orlando and Riverside had the highest rates of parenthood among young adults living with parents, out of the top 10 cities overall. In these cities, nearly three in 10 young adults who live at home with parents also live with a child of their own.
  • Of the top 10 cities where more adults are living with parents, the highest unemployment rates among this cohort are found in New Orleans (11.2%), Riverside (10.8%) and Baltimore (10.6%). In these cities, more than 1 in 10 of these adults living under their parents’ roofs are unemployed and actively seeking work.
  • The cities among the top 10 with the highest rates of nonparticipation in the labor force among adults living with their parents are San Antonio (25.3%), New Orleans (24.1%) and Orlando (19.5%).
  • Across the board, men make up the bigger share of adults who live with their parents, but the difference was more pronounced in some of the top 10 cities. In both Providence and Philadelphia, men make up a larger majority (56.7%) of adults living with parents. New York follows close behind, with a 56.2% male majority of adults living with their parents.

Then there are the cities where fewer adults (ages 25 to 40) are living with their parents, and are more likely to be living on their own. Four of these cities are located in the Midwest: Minneapolis, Indianapolis, Kansas City, Mo. and Columbus, Ohio. The South and West are also well represented in this list. In each region, there are three cities where these adults are less likely to be living in their parents’ homes.

Here is a closer look at other metrics that can inform these top 10 cities and their low rates of adults living with parents:

  • In these 10 cities, adults living with parents were more likely to be parents themselves, compared with the 10 cities where more adults live with parents. In Austin and Denver, 30% of adults living with parents had at least one child of their own living with them.
  • Raleigh and Indianapolis had the highest unemployment rates among these adults of the top 10 cities, at right around 12%. Austin and Kansas City had the lowest rates of unemployment among adults living with parents, at 5.4% and 5.6% respectively.
  • Among these 10 cities, Austin did have the highest share of adults living at home who aren’t participating in the labor force, however, at 22.5%. Portland and Indianapolis also had higher rates of labor nonparticipation among these adults living in parents’ homes, at just over 20%.
  • Minneapolis and Portland have the most uneven breakdown by sex of adults living with parents. Austin, on the other hand, is the only city we surveyed where a majority of adults living with parents are women, at 51.1%.

Full rankings

Our rankings surveyed the 50 most populous metro areas in the U.S. to find the proportion of adults (ages 25 to 40) living with their parents for each. See the table below for the full rankings for all 50 cities, along with key statistics on local adults who live with their parents.

How to prepare your money to move out on your own

Most adults living with parents hope to eventually move out on their own. If that’s you, careful planning can help you prep your finances, pay down debt and save enough money to make this happen sooner.

Here are some specific steps to take while you’re living with your parents to get financially healthy and launch your solo stage of life.

Make a plan to deal with debt

If you’re hoping to move out, you’ll have to deal with your debt first. The monthly payments on debt can be a burden that makes it harder to afford to live on your own.

Living at home is the perfect time to make extra payments toward debt and pay off some balances. Target your high-interest debt first, such as credit cards — these balances will cost you the most to carry from month to month.

Paying down debt is a great start, but your payoff date might still be years away while you’re hoping to move out much sooner. In these cases, you could refinance or consolidate debt to adjust your monthly payments or even secure a lower interest rate. Here are some options worth looking into:

Seek out a better job or side hustle

Unemployment, underemployment or exiting the labor force are among the biggest reasons adults live with their parents — and can’t move out. The only way to find your next gig is to apply, so keep your hopes and efforts up.

Applying for jobs can be tough, however, especially if you’re met with rejections. If your efforts seem to be going nowhere, see what you can do to make yourself a more attractive job candidate. Read up on job-seeking advice and ask for feedback from mentors or potential employers to improve your resume and prep for your next opportunity.

On top of actively seeking new or better employment, you can also consider picking up a side hustle or part-time job. This can help you develop new skills, build a portfolio and avoid a gap in employment — all while earning additional income and keeping money coming in.

Take advantage of low-cost living with parents

Living with parents isn’t always easy, but it comes with one major perk: low costs. Most adults who live with parents do so to benefit from either sharing living costs or skipping typical bills such as rent, groceries or utilities.

This lack of costs leaves more of your money available to tackle other financial goals. You can start building your move-out fund, saving for expenses like a deposit on an apartment and purchasing furnishings for your own place. Having an emergency fund in place before moving out can also be a wise move. Or you can use savings from living at home to pay down student loans or other debt.

Whatever your goal, set your sights and start using your freed-up funds to work toward it.

Methodology

Analysts used 2017 American Community Census microdata hosted on IPUMS to calculate the following percentages for people aged 25 to 40 and who did not identify as students: 1) Percentage who live in the same household with at least one of their parents. For those who both do and do not live with their parents, we separately calculated: 1) Percentage who live with their own children, 2) percentage who are unemployed, 3) percentage who are not part of the labor force, 4) percentage who are men, 5) percentage who are women.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Elyssa Kirkham
Elyssa Kirkham |

Elyssa Kirkham is a writer at MagnifyMoney. You can email Elyssa here

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Life Events, Pay Down My Debt

23 Ways to Get an Engagement Ring Without Going Into Debt

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

23 Ways to Get an Engagement Ring Without Debt

A marriage proposal can lead to much happiness, but it also can mean having to purchase an expensive engagement ring and, subsequently, getting into debt. If the diamond industry has anything to say about your engagement ring purchase, you’ll spend anywhere from one to three months’ salary on a diamond engagement ring. On average, couples spent $4,000 on engagement rings in 2012, according to a 2013 report from Jewelers of America.

However, a little forethought and some creativity can lead to significant savings and even a debt-free engagement ring. Think of it this way: It can be far more romantic to propose with a paid-for ring than to drag the equivalent of a car payment into your marriage. Here’s how you can purchase that ring without breaking your bank.

Set a budget

1. The first step you should take in the ring-buying process is setting a realistic budget for yourself. Don’t just go shopping with no maximum price in mind, as that may lead to you making a purchase you can’t really afford. If you know what you want to spend beforehand, and make sure you stick to that, you are already showing the kind of discipline that can help you avoid serious debt.

Heirlooms are a wallet’s best friend

Jewelry passed from generation to generation denotes sentimentality and fiscal prudence. Ask your family, or your future spouse’s family, if they have any heirlooms they would like to pass on. Keep in mind: Heirloom jewelry will be free, but the service and upgrades can run from a few hundred to several thousand dollars. If you do obtain an heirloom ring, consider these three options.

2. Leave the ring intact (except for resizing and repair).

3. Create a new setting for an heirloom diamond.

4. Incorporate a new band into the old ring design.

Buy your diamond on the cheap-ish

Real diamonds are never truly inexpensive, but knowing what and when to buy can save you a bundle.

5. Shop in the summertime. Because winter proposals are very popular (think Valentine’s Day), it can make a lot more financial sense to buy your diamond in the off-season. The summer months can offer stable pricing at a discount.

6. Buy diamonds shy of critical weights. If you want a full-carat diamond, look for something around .9 carats instead. You’ll get close to the same look at a nice discount.

7. Look before you buy. Compare diamonds at various areas of the color and clarity spectrum. If you can’t tell the difference in the diamond’s appearance, choose the less-expensive option. Also, be sure to comparison shop at different retailers; don’t just go with the first ring you love, as you may find something very similar, for less, at another shop.

Replace the diamond, save the difference

Thanks to the diamond industry’s multi-decade, multi-billion dollar advertising campaign, diamonds remain the most popular stone in engagement rings, but forgoing the traditional gem can save you thousands. Consider these emerging trends.

8. Choose synthetic diamonds. Diamonds created in labs share the same properties as mined diamonds, but they cost up to 75% less than traditional diamonds, and they are a great choice for those seeking to avoid conflict diamonds.

9. Replace a diamond with moissanite. A gemologist will never tell you this, but moissanite (a synthetic material) is the hardest gemstone used in jewelry next to diamonds, and it ranks high on clarity and color scales, too. It’s not a valuable gem, but it is beautiful. (Pro tip: Ask your future spouse before you go this route. Many people do prefer authenticity.)

10. Pick an alternative gemstone. Pearls or jade are popular choices outside of the United States, and garnet and topaz are gaining popularity stateside. If you want something out of the ordinary, consider alternative gemstones, but be aware that some gemstones are actually even more expensive than diamonds.

11. Skip gemstones altogether. Ornamental rings (especially knots) are popular choices for those who want to skip traditional gemstones. Handcrafted gold rings can be purchased for as little as $200 on Etsy.

Forgo tradition

Some of the best ways to save money on engagement rings involve breaking tradition, and some couples are more open to an alternative ring style than others. These are a few ring choices that definitely buck tradition.

12. Wooden rings: Wooden engagement rings occupy a large niche in the market, and can be a cost-effective alternative to precious metals. Wooden rings run anywhere from $50 for simple bands to several thousand dollars for rings that include ornate details and gemstones.

13. Tattooed rings: Some couples chose to get tattoos instead of rings, citing that nothing says forever quite like a tattoo. Keep in mind that this may be a dangerous option, as you will have a much harder time removing a tattoo than a ring if your relationship ends (either before or after the marriage).

14. Leather rings: Leather rings can include braiding, engraving and colored beads, among other stylings, and will certainly save you a bundle compared to a diamond. If you don’t want to go with real leather, faux leather can work as well.

15. Go dutch. If the ring in question is outside of your price range, consider asking your sweetheart to split the cost with you. As you’ll be combining finances after you’re married, this may actually lead to some great money-focused conversations.

Save money now, upgrade later

If your partner has a big diamond taste, but you’ve got a small budget, then consider upgrading later on. Here’s how.

16. Propose with costume jewelry. If you think you can save up for the real ring by the time of your wedding, an inexpensive piece of costume jewelry may be just right for the proposal.

17. Build as you go. Start with a simple band and stone, and add more or bigger gems for anniversary milestones, or upgrade when you can afford it.

Buy used

Consider buying a ring that already has a history. You can have the ring professionally cleaned to give it new beauty and make it “yours.”

18. Visit pawn shops. You may be buying the ring of a recent divorcee, but the savings can be irresistible.

19. Search estate sales. If you regularly shop estate sales, you might uncover a vintage ring at a spectacular price. Rings that aren’t presented with a certificate of authenticity will give you room to negotiate on price, but you may accidentally buy overpriced junk. This technique is best for people with an eye for authenticity.

20. Shop on eBay. Pre-owned rings from eBay can represent about a 30% discount over identical new rings, and many owners provide certificates of authenticity.

Creative ways to get cash

Whether you’ll spend a few hundred dollars or thousands, an engagement ring doesn’t have to mean big debt. Consider a few creative ways to save the cash you need to pay for a ring in full.

21. Sell your memorabilia. Your partner may not be too enthusiastic about your KISS memorabilia, or your 27 signed hockey jerseys. Selling these to help pay for an engagement ring will be a double sign of your love.

22. Save up, way in advance. If you’re not currently in a serious relationship, but you think you’re the marrying kind, consider setting aside some cash for a future ring purchase. While some people may find this a strange thing to do, there is no harm in being over-prepared. If you don’t end up using the money to buy a ring, it will be on-hand for other potential purchases (think a wonderful vacation, or a luxury item you really want).

23. Get a side hustle. People are increasingly taking on side hustles to earn extra cash, even if they have full-time jobs. This can include selling your artistic creations on Etsy, becoming an Uber or Lyft driver or writing freelance articles. Then you can put all the extra money you earn into an account for a ring.

Consider a personal loan

It is definitely ideal to be able to purchase an engagement ring without going into debt at all. However, if you simply have to finance at least part of the ring’s purchase, you might consider a personal loan, as you may be able to get a better interest rate than with a credit card, depending on your own credit and where you are able to obtain your loan.

Bottom line

Getting married can be an expensive undertaking, and you don’t want to put yourself in a difficult financial place just by purchasing the engagement ring. Keep in mind the alternatives to the traditional pricey diamond, and also remember that the love you share with your partner should be far more important than buying a ring with a sky-high price tag. Avoiding debt as much as you can also means you’ll be starting off your new marriage on a financially healthy note.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Hannah Rounds
Hannah Rounds |

Hannah Rounds is a writer at MagnifyMoney. You can email Hannah here

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Life Events, Mortgage

What Is Mortgage Amortization?

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Getty Images

One of the biggest advantages of homeownership versus renting is each mortgage payment gradually pays off your mortgage and builds equity in your home. The difference between your home’s value and the balance of your loan is home equity, and your equity grows with each payment because of mortgage amortization.

Understanding mortgage amortization can help you set financial goals to pay off your home faster or evaluate whether you should refinance.

What is mortgage amortization?

Mortgage amortization is the process of paying off your loan balance in equal installments over a set period. The interest you pay is based on the balance of your loan (your principal). When you begin your payment schedule, you pay much more interest than principal.

As time goes on, you eventually pay more principal than interest — until your loan is paid off.

How mortgage amortization works

Understanding mortgage amortization starts with how monthly mortgage payments are applied each month to the principal and interest owed on your mortgage. There are two calculations that occur every month.

The first involves how much interest you’ll need to pay. This is based on the amount you borrowed when you took out your loan. It is adjusted each month as your balance drops from the payments you make.

The second calculation is how much principal you are paying. It is based on the interest rate you locked in and agreed to repay over a set period (the most popular being 30 years).

If you’re a math whiz, here’s how the formula looks before you start inputting numbers.

Fortunately, mortgage calculators do all the heavy mathematical lifting for you. The graphic below shows the difference between the first year and 15th year of principal and interest payments on a 30-year fixed loan of $200,000 at a rate of 4.375%.

For the first year, the amount of interest that is paid is more than double the principal, slowly dropping as the principal balance drops. However, by the 15th year, principal payments outpace interest, and you start building equity at a much more rapid pace.

How understanding mortgage amortization can help financially

An important aspect of mortgage amortization is that you can change the total amount of interest you pay — or how fast you pay down the balance — by making extra payments over the life of the loan or refinancing to a lower rate or term. You aren’t obligated to follow the 30-year schedule laid out in your amortization schedule.

Here are some financial objectives, using LendingTree mortgage calculators, that you can accomplish with mortgage amortization. (Note that MagnifyMoney is owned by LendingTree.)

Lower rate can save thousands in interest

If mortgage rates have dropped since you purchased your home, you might consider refinancing. Some financial advisors may recommend refinancing only if you can save 1% on your rate. However, this may not be good advice if you plan on staying in your home for a long time. The example below shows the monthly savings from 5% to 4.5% on a $200,000, 30-year fixed loan, assuming you closed on your current loan in January 2019.

Assuming you took out the mortgage in January 2019 at 5%, refinancing to a rate of 4.5% only saves $69 a month. However, over 30 years, the total savings is $68,364 in interest. If you’re living in your forever home, that half-percent savings adds up significantly.

Extra payment can help build equity, pay off loan faster

The amount of interest you pay every month on a loan is a direct result of your loan balance. If you reduce your loan balance with even one extra lump-sum payment in a given month, you’ll reduce the long-term interest. The graphic below shows how much you’d save by paying an extra $50 a month on a $200,000 30-year fixed loan with an interest rate of 4.375%.

Amortization schedule tells when PMI will drop off

If you weren’t able to make a 20% down payment when you purchased your home, you may be paying mortgage insurance. Mortgage insurance protects a lender against losses if you default, and private mortgage insurance (PMI) is the most common type.

PMI automatically drops off once your total loan divided by your property’s value (also known as your loan-to-value ratio, or LTV) reaches 78%. You can multiply the price you paid for your home by 0.78 to determine where your loan balance would need to be for PMI to be canceled.

Find the balance on your amortization schedule and you’ll know when your monthly payment will drop as a result of the PMI cancellation.

Pinpoint when adjustable-rate-mortgage payment will rise

Adjustable-rate mortgages (ARMs) are a great tool to save money for a set period as long as you have a strategy to refinance or sell the home before the initial fixed period ends. However, sometimes life happens and you end up staying in a home longer than expected.

Knowing when and how much your payments could potentially increase, as well as how much extra interest you’ll be paying if the rate does increase, can help you weigh whether you really want to take a risk on an ARM loan.

The bottom line

Mortgage amortization may be a topic that you don’t talk about much before you get a mortgage, but it’s certainly worth exploring more once you become a homeowner.

The benefits of understanding how extra payments or a lower rate can save you money — both in the short term and over the life of your loan — will help you take advantage of opportunities to pay off your loan faster, save on interest charges and build equity in your home.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Denny Ceizyk
Denny Ceizyk |

Denny Ceizyk is a writer at MagnifyMoney. You can email Denny here

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