Gen Z's big gamble

 After completing her college education in 2021, Bethany Clark returned to her parents' home in Surrey, England. She initially planned to live there for a year while studying to become a teacher, without earning an income. However, when she secured her first teaching job the following year, she chose to remain with her parents, citing the absence of substantial savings as a reason. Now 24, she continues to reside with her parents and intends to do so for another one or two years.

Similar to Clark, many other adults have opted to live with their parents for an extended period. In the UK, there are 620,000 more adults living with parents now than a decade ago. Likewise, in the US, the percentage of young adults living at home has increased by 87% over the last twenty years, with over half of 18- to 24-year-olds now residing with their parents. The rising trend is largely attributed to the challenges in the housing market. The average American renter was reported to be spending over 30% of their income on rent for the first time in 2022, causing considerable strain on the youngest renters.

Skyrocketing housing costs and stagnant wages have made independence a luxury that many young people simply cannot afford. This has resulted in early adulthood becoming a new life stage, termed "emerging adulthood," by psychology professor Jeffrey Jensen Arnett. It's a period where individuals feel that they are in between stages of life, delaying traditional milestones such as moving out, buying a home, and starting a family.

However, living with parents for an extended period can have downsides. Emotionally and financially, it can be challenging. It may delay achieving independence and adult responsibilities, leading to higher levels of depressive symptoms and tension within the family. Additionally, those living with their parents are less likely to become homeowners after a decade and face challenges in establishing a credit history.

Despite these drawbacks, living with parents is often considered a smart financial move given the high cost of housing. Many young adults feel content and even smart for making this choice, as it enables them to save and avoid the financial burden of renting. However, there are concerns about whether this trend is sustainable and if it may hinder wealth accumulation in the long term.

In addition to the housing issue, there has been a resurgence in the use of cash among Gen Z individuals, with many opting to keep large sums at home, a trend that is gaining popularity through social media platforms like TikTok. While cash stuffing is considered an effective budgeting method by some experts, others raise concerns about the safety and long-term financial implications of this practice, especially in the digital age.

In conclusion, the trend of young adults living with their parents and the resurgence of cash usage reflect the evolving financial challenges and lifestyle choices of the newer generations, eliciting both support and caution from experts.  

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