Financial freedom feels far away for the 30-year-olds moving home to save money

Nimra Haroon made a big change when she moved out for the first time at 23. Now, less than 10 years later, she’s made another major step for her future — by moving back home again.

Haroon lived at home during college, commuting between her parents’ house in a suburb outside Houston and her classes in the city. That worked for her at the time, but she regretted not having a traditional college experience. She moved to Washington, D.C. shortly after graduation for work, where she enjoyed having space away from her parents.

But D.C. rents aren’t cheap. Last year, she realized there was no way she could simultaneously pay for a high rent, pay off her debt and help her parents financially, who were growing older and needed more medical assistance. At 30, she made the decision to move back home.

In today’s challenging economic climate, millennials (ages 28-43) like Haroon are struggling to keep up with the financial demands of being in their 30s: paying rent, affording everyday expenses, trying to save for a home or build an emergency fund, learning to invest, paying off student loans, saving for retirement and more. To do it all, many millennials are leaning on their resources — such as moving in with their parents.

More than 2 in 5 (42 percent) millennials currently receive, or have received, ongoing financial assistance from their parents/guardians at age 23 or older, according to Bankrate’s April 2024 Financial Independence Survey. Of those receiving help, millennials are the likeliest generation (52 percent) to need financial assistance with housing, including assistance with rent payments, financial help toward the purchase of their first home and being permitted to live with parents/guardians for reduced or free rent.

There’s no shame in adults living with their parents, and having the opportunity to pay off debt and save for a future home can feel empowering. Some millennials, like Haroon, are also happy for more quality time with their aging parents. But by giving up freedom when moving back home, many young adults may also feel they’re missing out on an important period of independence.

Bankrate’s insights on millennials living at home

More millennials’ parents help with housing than any other generation

Millennials being helped financially by their parents/guardians are the likeliest generation to receive (or have received) ongoing help with housing, according to Bankrate’s Financial Independence Survey. That includes their parents/guardians helping with rent payments or permission to live at home with free or reduced rent (38 percent), as well as the purchase of their first home (19 percent):

Source: Bankrate survey, April 15-17, 2024

Notes: Respondents could select more than one response; Percentages are of U.S. adults who received ongoing financial assistance from parents/designated guardians at age 23 or older.

Millennials are commonly receiving help from their parents/guardians in part because the path to build wealth looks different for them compared to their previous generation. While all generations face some degree of financial challenges, millennials faced back-to-back setbacks during what should have been key periods to build wealth, according to Bankrate Lead Data Reporter Alex Gailey.

“Millennials just can’t catch a break,” she says. “In 2008, the youngest millennials were beginning to enter the job market, when the economy took a turn for the worse. They had a harder time securing jobs shortly after earning their college degrees, were saddled with student loan debt and struggled to gain financial traction in the years to follow.”

Then, during the pandemic, many millennials suffered from mass layoffs and reduced wages. By 2022, inflation impacted millennials’ ability to save or curb their spending. Millennials hoping to buy a home since 2022 are now facing their latest blow: sky-high mortgage rates and home prices.

As a result, 41 percent of millennials said they have a harder time building financial wealth than their parents did at their age due to the economy, according to Bankrate.

Gailey understands firsthand how living with parents can help millennials financially. She moved in with her mother in 2022, where she — along with her husband and two dogs — lived rent-free to save money for a move to New Jersey.

“My husband was taking a sabbatical, and I was working full-time remotely, but it would’ve taken us double the amount of time to save up for the move if we hadn’t lived rent-free for a few months with my mom,” Gailey says. “While I was living at home, I was also able to redirect more of my income toward my student loan debt and pay some of those balances faster.”

Millennials are being pushed to delay financial milestones

Millennials today face numerous hurdles that keep them from taking what could be their next big financial milestone, like buying a house, paying off student loan debt or increasing their savings.

In Washington, D.C., Haroon lived with her sister, and the two paid nearly $3,000 a month, combined, on rent, utilities and other housing-related costs. The combination of rent costs, paying off around $10,000 in credit card debt and $60,000 in graduate school student loan debt, as well as taking on more of her parents’ medical bills, meant she was finding it harder to afford to stay in D.C.

If she was going to pay off her debt, she would have to make changes. Haroon makes around $8,300 a month between her full-time role in social impact communications and her side hustles. However, she knew her salary wouldn’t be enough to cover all of her expenses. Last fall, instead of renewing her lease, she made the decision to come back to Texas.

“I didn’t need to be in D.C.,” Haroon says. “As much as I would love to live there, I want to buy a house. I want to have a car. I have student loans to pay, and I can’t do it all with my salary, so something had to give. The piece that was on the chopping block at that point was paying rent.”

High housing prices and high rent alike are eating into Americans’ budgets, Gailey says. Whether you’re a renter or homeowner, the price of housing can leave much less room to save for future financial goals.

“It’s hard to save for a down payment or pay down student loan debt when you’re also faced with high rent and daily expenses — especially if you’re in between jobs,” Gailey says. “Many young Americans are making sacrifices, like temporarily moving back in with their families, so they can better their finances.”

If you’re living at home, take the opportunity to focus on building your savings, paying off debt or both. If your goal is to build your savings, Gailey advises building three to six months’ worth of expenses in an emergency savings fund. When you’re comfortable with your amount of emergency savings, focus on long-term goals like a down payment on a house or retirement.

If your priority is to pay off debt, Gailey advises chipping away at high-interest debt first. If you have a credit score of 670 or higher, consider a balance transfer card to take advantage of a 0 percent interest rate for several months and pay off that debt even faster.

Free rent is helpful, but millennials have other financial reasons to live at home, too

Despite moving home, Haroon didn’t pay off debt overnight. She is both a physical and financial caretaker for her parents, and she helps them with their mortgage and health care costs. It’s a symbiotic relationship; in addition to the room and board, she is enjoying her mother’s cooking and her parents’ help during tax season.

“I can maintain a healthy lifestyle. (My parents help with) anything from getting groceries, to taking care of a pet or making phone calls. I think we’re able to pool our resources in our household,” Haroon says.

With this arrangement, she’s chipping away at her debt, albeit slowly. She’s also taking advantage of her parents’ help to explore new ways to grow her career. Additionally, she’s slowly saving for a down payment on a home in Houston. This all would have been difficult for her to achieve if she still lived alone.

Haroon misses the freedom from living in D.C., and she admits not everyone can make the same trade-off she did. But she’s glad she made the move. When she finally does buy a home of her own, she plans to purchase one large enough for her parents to live with her, so she can support them, too.

• Methodology

  The survey on financial independence was conducted by YouGov Plc. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,377 US adults, among whom 837 are parents with adult children aged 18 or older. Fieldwork was undertaken between 15th – 17th April 2024. The survey was carried out online and meets rigorous quality standards. It employed a nonprobability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.

  The survey on homeownership and the American Dream was conducted by YouGov Plc. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,317 adults. Fieldwork was undertaken between 6th-8th March 2024. The survey was carried out online. It employed a non-probability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.

  The study on emergency savings (that was conducted January 2024) was conducted by SSRS on its Opinion Panel Omnibus platform. The SSRS Opinion Panel Omnibus is a national, twice-per-month, probability-based survey. Data collection was conducted from January 19 – January 21, 2024 among a sample of 1031 respondents. The survey was conducted via web (n=1001) and telephone (n=30) and administered in English (n=1005) and Spanish (n=26). The margin of error for total respondents is +/- 3.6 percentage points at the 95% confidence level. All SSRS Opinion Panel Omnibus data are weighted to represent the target population of U.S. adults ages 18 or older.

  Bankrate commissioned YouGov Plc to conduct the survey on younger generations building wealth. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,233 U.S. adults. Fieldwork was undertaken between Dec. 18-20, 2023. The survey was carried out online and meets rigorous quality standards. It employed a non-probability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.