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From experiencing an economic downturn or needing support while starting a business to living in an area with high rent costs or saving for big financial goals, there are numerous reasons why adults might live with their parents. In fact, it’s not that uncommon, depending on where you live.
To figure out where adults ages 25 to 40 are more likely to live with their parents, MagnifyMoney took a second look at the topic, again excluding those who identified as students.
Riverside, Calif., took our top spot again. Here’s what we found.
Five of the 10 metros with the highest percentage of adults ages 25 to 40 who live with their parents are in the South, followed by three in the Northeast and two in the West.
Taking a closer look at these 10 metros, there are interesting details and commonalities within the 2018 data:
Among the 10 locations with the lowest percentages of adults 25 to 40 who live with their parents, the Midwest had the largest representation with four metros. The West was next with three metros, followed by the South with two and the Northeast with one.
Here are some other highlights for these 10 metros:
The metro with the most drastic difference in earnings was Seattle, where those who don’t live with their parents earn about $64,000 more a year on average than those who do. Among the 50 metros, Seattle had the highest average annual earnings for adults ages 25 to 40 who don’t live with their parents by more than $13,000, which could help contribute to its status as the metro with the largest wage gap.
At the other end of the spectrum, San Francisco residents had the smallest gap between these two segments — less than $10,000 a year.
Employed adults in San Diego could face the steepest challenges when looking to move out of their parents’ home into a one-bedroom, as rent — on average — would cost 48.4% of their earnings. In 36 of the 50 largest metros, renters on average would need to put more than 30% of their income toward rent alone.
Our study used 2018 data — the latest available on the topic — to determine where adults were living with their parents. But fast forward to 2020: With the coronavirus crisis throwing a wrench in many people’s plans, it’s possible we’ll see an uptick in the moving-in-with-the-folks trend.
“The coronavirus pandemic has triggered high levels of unemployment, and young adults are just one of the many groups of people that have been impacted,” said Sarah Berger, MagnifyMoney’s millennial finance columnist. “For those who have lost their source of income during this time, moving back in with their parents can be an easy way to save money on housing costs.”
The work-from-home movement could be another factor for moving in with parents, Berger noted, as cramped apartments have less appeal than the comfort and savings that may be gained by making the move. This is especially true for those who owe student loans.
This doesn’t mean paying rent to your parents, though that’s certainly a good thing to do if you can swing it. Instead, Berger recommends funneling “rent” money into a separate savings account while living at home. That way, you can accumulate cash that can be used for your future living expenses, giving you a financial cushion in the meantime.
“You are already used to cutting a rent check every month, and this is a smart way to build your savings without having to think twice about it,” she said.
Minimizing your expenses is always a good idea when you have a large savings goal in mind. And during a pandemic, when so much seems to be in question when it comes to the future, focusing on spending less — wherever possible — is a good idea.
“Working hard where you’re at and with what you have — meaning consistently saving money and cutting back on unnecessary expenses — can still put you on the right path,” Berger said.
Selling some of the furniture you accumulated in your apartment or house before living with your parents might be a good option, particularly if you don’t have the space to store it or can’t swing a monthly storage fee.
Of course, this will depend on how comfortable you are with selling your stuff. It’s important to consider personal health and safety amid the coronavirus pandemic when, for instance, selling things online.
It can be tough to find new employment during an economic downturn when many companies are hurting for cash, but Berger said it’s still worth pursuing. Similarly, a side hustle that uses your existing skill sets can be a good option, especially if you’re unemployed at this time.
Either way, remember to “be kind to yourself during this time,” Berger said. “It’s a tough job market out there, so give yourself grace.”
Analysts used 2018 American Community Survey microdata hosted on IPUMS to calculate the following percentages for people ages 25 to 40 in the 50 largest U.S. metros who didn’t identify as students:
We also calculated: