Free money finance had a post on Tuesday that touched on something I’ve experienced second hand. Individuals moving back in with their parents after college. The post was inspired by an article on the Wall Street Journal. Although I never had to experience this myself I’ve known quite a few people who have. In fact my sister is currently dealing with this issue as we speak.
I live in a different state from my family and I often only visit about once a year. After all family is spread out over two states and one country. I only receive three weeks of vacation from work each year, you can do the math! This past week my wife and I drove out to my parents so they could see their grandson. Between the five of us it was a full house then there was the addition of my sister. My sister recently returned from college an internship under her belt, a diploma in one hand and student loans in the other hand. My sister is staying with my parents for an undefined period of time. The place she had her internship with has not called her back in two weeks and the bill for the student loans requesting payment will soon start coming in.
From the Wall Street Journal Article:
“The proportion of 18- to 34-year-olds living with their parents has risen by an estimated five percentage points since 1980, to roughly 34%,” says Aaron Yelowitz, an associate professor of economics at the University of Kentucky and a contributor to the collection of studies
This brings up the question what are the options for students finishing college? I have many friends in New York who just can not afford to live on their own. For anyone living in a place like New York you can attest to the high cost of living there. How is one supposed to come out of college, head straight into the work force and live on their own? This is the reason many basements in New York have become single unit apartments. Factor in a high cost of living with an economy in question and thing’s just don’t look good. I have one friend who is in a catch 22 in New York. He would like to pursue a career in Information Technology yet the market in New York is so competitive. The companies want people with experience and a degree. He is constantly emailing me asking how he can obtain experience if no one is willing to give him a job! I was fortunate enough to see the need to have experience. I decided in high school that I would pursue a short term career in the military. Not only did the military give me money for college it also gave me 4 solid years of industry experience. This isn’t the case for everyone though. Most college graduates are in the position of my friend in New York, and few are in the position of my sister who at least had a 6 month internship as part of her degree.
The advice I gave to my sister was to stay at our parents house as long as she can. She discredited my advice suggesting independence was better. I don’t think most people consider the costs of real life. If my sister were to get the job she interned for she would receive a substantial discount on rent to the tune of rent being $250.00. Let’s analyze the bills:
Rent: $250.00
Water: Let’s say $30.00
Power: 80 in winter, 120-150 in summer (southern living is hot!)
Cable/Internet: $100 (rounded)
Cell Phone: $60-120
Groceries: Ranges from $200-400
I understand the desire for her independence, however I suggested it would be wise if she seized this opportunity to “Snow ball” her student loans and pay them off in a year. She is fortunate in the sense that she will receive a discount on rent. Personally I would be willing to suck up spending a year with my parents after college in exchange for having a stable financial independence! What are your thoughts? Have you moved back in after college? Already past that point? What advice do you have for the recent graduates?
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