You hit the nail on the head, but I'll add a few thoughts of my own.
I'm 22 years old, I graduated with an engineering degree this may and started working 5 weeks ago at a full-time job. The job required me to move out on my own. My girlfriend (of 5 years) and I decided to do it together so she moved as well and she's looking for a job. We pay all of our own bills.
I have an older brother (26) who also has a technical degree and is full time employed, but both he and his girlfriend still live at home and are "planning" on moving out soon.
Financially they are in a much better position. They make roughly comparable salaries as we do, but their expenses are basically only for health care, their cars, their cell phones, and any discretionary spending. The parents pay for a roof, food, utilities etc. They can save up their cash and are trying to move directly from living at home to buying their own place so they skip the renting waste of money (please don't get into that firestorm here, I've heard all the arguments, suffice to say they're saving money by not renting right now).
In contrast, I'm paying absolutely everything. We have roughly $1800 a month in rent and bills that they don't have. It sure isn't as expensive as living in NYC but thats 22 grand a year that we're not putting in the bank that we would have if we could have found a job near home and lived with our parents.
So financially, moving home after college makes a lot of sense. Especially if you have loans. If I were living at home I'd be putting that 22 grand a year into starting my own company instead of paying a landlord and some utility companies.
On the other hand, we're getting an experience they're not. I go home and my brother is considering buying some fancy ass car, meanwhile my girlfriend and I are juggling bills and debt to make ends meet (that first month when you have to pay all your bills but haven't actually gotten a full months of pay SUCKS). It is nerve racking and I feel like we're "maturing" because of it.
In the end will it pay off for us? I doubt it will financially but it might in other ways. But if you look at our friends, maybe 5 or 6 out of 20 that just graduated moved out and the rest went home. It is by far the norm to move home after college now.
(Also your quote about the 20 year olds driving nuclear bombers struck me. I showed up for work (engineer at a military contracter) and suddenly I'm surrounded by a bunch of teenagers in uniform running all of the multi-million dollar weapon systems we make and I got a "they're just kids!" emotion that makes me feel really damn old. )
>They can save up their cash and are trying to move directly from living at home to buying their own place so they skip the renting waste of money (please don't get into that firestorm here, I've heard all the arguments, suffice to say they're saving money by not renting right now).
It's interesting that you feel the need to defend this, whereas in places outside the mainstream US culture, like Hawaii, it's the norm. Children are more likely to live at home through and after college until they've saved enough for a down payment on a home or apartment, and then move out.
Financially it's smart, it keeps families together longer, parents get to bond with their children as young adults, share life lessons the kids may not have appreciated at an earlier age, and other good things. But for some reason it's all taboo in mainstream American culture.
Where I live, I probably wouldn't buy. The town is dependent on exactly three businesses for jobs. There are 30,000 jobs from those 3 businesses, but that is it. One company moving out (already threatened this year) or one canceled government contract (already threatened this year) and boom the housuing market is dead. I wouldn't tie myself in a house here for any reason, so I get there are reasons why renting is preferable.
But renting also feels like such an incredible waste of money.
Unfortunately, a lot of people who are anti-buying jump all over threads that even mention the conventional wisdom that buying is preferable to renting. Like everything in the real world, the answer is always "it depends".
That said, I feel like there is a negative stigma attached to living at home after college for everyone except those in the 22-27 crowd. I know when I was 17 I thought, I wouldn't be caught dead living at home after college. Now that I'm staring the bills down, I totally get it. I'm sure a lot of older adults are saying "how can these kids still live at home, they're 24!", but the economics of it make a lot of sense, and if your parents aren't a hassle why not?
> But renting also feels like such an incredible waste of money.
Just be honest with your accounting, when you buy a house. Apart from doing small repairs and all the paperwork yourself, there shouldn't be much of a difference between living in your own house vs renting and using the capital that would be tied down in a house to buy some shares or bonds instead.
Self-sufficiency is good for the soul. I would suspect that whether he admits it or not, your brother feels some guilt to atill be mooching off the folks at age 26. This is not good psychologically.
Parents don't have to push the kids out of the house they day after high-school graduation, like a fledgling from the nest, but fully covering rent, food, utilities (did they also pay for his degree?) is in the long run not doing your brother any favors -- it is just delaying the lessons he'll have to learn the hard way later about personal finances, choices, and responsibility.
I felt bad living with my in-laws. I moved to Canada from the UK to live with my wife, had to wait for the government to let me work legally (took way too long and went through way too much BS that the government gives a free pass to like the Tamil's who just landed who have been given immigration lawyers at the governments expense, but I was expected to have to pay hundreds of dollars for any chance to get a lawyer and had to do all the paperwork myself) for a job I already had lined up.
We recently moved out and I feel so much better. There was so much pressure that wasn't even being processed by my consciousness. I didn't make phone calls because I didn't want to be tying up the phone line (my in-laws also have a lot of far-flung relatives that stay in frequent contact) for an hour or more talking to my parents. We didn't want to have friends over too often because it wasn't our house.
Me and my wife are covering food/rent/utils/services by ourselves, putting a decent amount into savings and have the freedom to do what we want. We're 22/21 and we're responsibly using credit cards, financing and still saving money; yet my brother who easily earns twice as much as me and is older still manages to go overdrawn because he was never motivated to move out.
A very good comment, thank you for adding your experience.
Financially moving home makes a lot of sense, if the parents are willing to shoulder the financial burden. Those parents are paying for the food and electricity the children are using. They are paying an opportunity cost on that room the children are using (they could have used it for their own purposes or even rented it out).
Granted, there is a certain economy of scale in living together, but you can get a similar effect by taking in roommates (I did that for part of college). If the parents were to insist on the children paying close to fair market value for that food, electricity, and rent then the kids would get some benefit, but it would be nowhere close the huge difference you are talking about.
I think both sides need to be taken into account for full maturity.
Sounds like your brother is taking the easy route but planning for the future. Sounds like you are taking the hard route and learning a heck of a lot more.
Your brother will learn what you are now when he finally gets on his own (albeit up to 6-7 years in his own time after you did), and later you'll be more mature to plan better.
It doesn't need to be either-or. I juggled bills on my own without help from mommy and daddy and within 2 years me and my fiance have bought our own place. All while paying for rent, utilities, food, gas, student loans, car payments, back surgeries, multiple moves, etc.
It all comes down to focus, discipline, drive, and a large dose of humility along the way. Something not many 20-somethings admittedly display consistently.
I've had both experiences. I worked full time from my sophomore year until now. I graduated last august and moved back to Canada with my wife. We can't afford anything right now so my dad was nice enough to let us live whit him. Before graduation I was able to pay everything plus the apartment with student loans and my job. Now that the loans need to be payed and my wife can't work for immigration reason language reason she is still in school.
I don't feel bad about it, it's just the only solution at the moment. Loans are getting paid and our car will be paid soon so it's only a matter of time before were on our own again.
I can respect both ways - I left home at 16, but I once got to know an Australian guy who was still living at home when he got a job in finance, lived on a ramen-and-no-fun budget even while making $60k per year, and invested it all into real estate and became quite wealthy.
I used to think people who don't move out are lame or scared, but then I came to Asia. It's normal here - you don't move out until you get married, but you save the money for a house, kids, whatever. Someone who lives at home and then blows their cash on junk is in the worst of both worlds.
I'm 22 years old, I graduated with an engineering degree this may and started working 5 weeks ago at a full-time job. The job required me to move out on my own. My girlfriend (of 5 years) and I decided to do it together so she moved as well and she's looking for a job. We pay all of our own bills.
I have an older brother (26) who also has a technical degree and is full time employed, but both he and his girlfriend still live at home and are "planning" on moving out soon.
Financially they are in a much better position. They make roughly comparable salaries as we do, but their expenses are basically only for health care, their cars, their cell phones, and any discretionary spending. The parents pay for a roof, food, utilities etc. They can save up their cash and are trying to move directly from living at home to buying their own place so they skip the renting waste of money (please don't get into that firestorm here, I've heard all the arguments, suffice to say they're saving money by not renting right now).
In contrast, I'm paying absolutely everything. We have roughly $1800 a month in rent and bills that they don't have. It sure isn't as expensive as living in NYC but thats 22 grand a year that we're not putting in the bank that we would have if we could have found a job near home and lived with our parents.
So financially, moving home after college makes a lot of sense. Especially if you have loans. If I were living at home I'd be putting that 22 grand a year into starting my own company instead of paying a landlord and some utility companies.
On the other hand, we're getting an experience they're not. I go home and my brother is considering buying some fancy ass car, meanwhile my girlfriend and I are juggling bills and debt to make ends meet (that first month when you have to pay all your bills but haven't actually gotten a full months of pay SUCKS). It is nerve racking and I feel like we're "maturing" because of it.
In the end will it pay off for us? I doubt it will financially but it might in other ways. But if you look at our friends, maybe 5 or 6 out of 20 that just graduated moved out and the rest went home. It is by far the norm to move home after college now.
(Also your quote about the 20 year olds driving nuclear bombers struck me. I showed up for work (engineer at a military contracter) and suddenly I'm surrounded by a bunch of teenagers in uniform running all of the multi-million dollar weapon systems we make and I got a "they're just kids!" emotion that makes me feel really damn old. )