Photo credit: Jason Bache
Sure, it’s a tough economy out there — for everyone. But a new trend among Gen Y consumers reveals just how tough it really is.
A subgroup of Milliennials is now emerging that shows how Gen Yers are some of the hardest hit by the current economy. These are the Gen Yers who, after graduating college, are finding themselves returning home to live with their parents. They’re known to marketers as Boomerangers because, well, they keep on coming back. And there are a lot of them.
How many? That’s the startling part. Today’s tough job market — close to 15% for ages 20-24 — means a full 85% of college seniors planned to move back home after graduating in May 2010.* Just four years prior that number was only 67%.
The not-so-startling part of the story is why: With job prospects so low, recent graduates are having a tough time paying rent and repaying sky-high student loans. A little time at “Hotel Mom” gives them that much-needed chance to start saving — while getting three squares a day and maybe even a bit of spending money on the side.
What is surprising is how much this trend is costing parents. On average, parents spend an additional $5,800 a year when a child returns home post-graduation, and 42% of those Boomerangers pay no rent. That same number of parents — 42% — admit that the presence of an adult child in their home has an adverse effect on their own finances. And that’s a significant effect, since some 40% of US young adults say they rely on their parents for support after graduation.
Even so, many parents say they like having their kids around and want to make sure they get a good start in the adult world, even at a detriment to the parents’ finances. Still, it’s a trend that is radically changing the spending habits of younger Gen Yers — and their parents, too.
Stylus, Boomerang Kids – A Perfect Storm; http://money.cnn.com/2010/10/14/pf/boomerang_kids_move_home/index.htm