Stay-at-home Millennials and Generation Z are ‘train wrecks’ thanks to their parents, says personal finance expert Dave Ramsey
Personal finance expert Dave Ramsey has a lot to say about… Almost half of young people still live at home—a level that hasn’t been this high since the Great Depression.
This group (those between the ages of 18 and 29) is driving the growth of luxury goods in the United States, Morgan Stanley analysts say In a December report. The analysis found that living at home freed up discretionary spending for older millennials and younger millennials, enabling them to snap up designer handbags and watches. Ramsey, a self-made millionaire and author of several personal finance books, has criticized this trend in A The latest episode of “The Ramsey Show”.
“So, let me get this straight. You live in your mom’s basement, but you’ve got a coach bag,” Ramsey said. “Here’s what happens—you can’t avoid life, it’s coming for your ass. Mama can’t protect you. “
Saying that this trend will result in a “train wreck”, Ramsay does not blame the youth but their parents for the “out of control” helicopter parenting and “pampering”.
Jade Warshaw added, “The problem is you have debt, you don’t make enough money, you don’t do enough to go out and change it.” “Mom and Dad can’t do this for you.”
But the situation is a little more complicated than that. Economics, rather than parenting or a lack of willpower, forces many young adults to live at home. (Ramsey’s team did not respond to a request for comment.)
Living at home can help young people save money
Millennials, a highly educated group that emerged during the Great Recession and its aftermath, entering a tough job market while saddled with massive student loan debt. Since then, many have managed to do so Make strides in building wealthbut the long work of getting there has propelled them to marry, start a family, and buy a home much later than their parents did–even if they participated in those life stages at all.
“It’s almost as if we don’t want millennials to get a piece of the American Dream,” said Andre Perry, a senior fellow at the Brookings Institution. luck in November.
Generation Z has also faced its share of financial challenges, with the largest of them being thrown into a pandemic and dismal job market at the start of their careers. while they Gained the upper hand at work With the labor market back on and the threat of a recession spurring them on Saves more than other generationsmany Doubt they will be able to save Enough to retire and/or buy a home.
Both generations now face 40-year-old inflation for the first time, with some unable to afford a roof over their heads. Rental prices in the United States rose a lot last year Americans now have to work an extra six hours a month to make ends meet than they did before the pandemic.
Extremely high rent is why 39% of millennials who moved back in with their parents last year did so, per Survey by PropertyManagement.com. More than half said they came home to save more money.
It is proof that living at home with parents can be financially beneficial. “This should not necessarily be seen as a negative as long as there are clear financial goals,” Doyle Williams, executive vice president at financial stateAnd he said back in 2018adding that this could help millennials build an emergency fund and save for a down payment.
At the time, the state’s Financial Security Index found that 35% of millennials still lived at home with their parents. That stands at one in four today, according to a PropertyManagement.com survey. A separate study found that nearly 30% Older generation Zers still live at home with their parents, and have been prevented from going out on their own due to the high cost of living.
Sure, some young people would rather treat themselves — after all, Generation Z is driven provision of physical goods More than any other generation began spending on these Earlier high-ticket items. But if this is the case for those who live at home, it doesn’t mean that they, too, aren’t doing their best. It also doesn’t mean that every shuddering baby flaunts luxury.
Many are just hoping that one day living with their parents will help them afford what would have been so easy to get again for mom and dad.
This story originally appeared on Fortune.com
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