The recession due to the pandemic has made life difficult for many people. Many consider moving in with their parents to save on rents and other expenses until they get back their jobs. This situation is common with many youngsters who are not having much savings and who depend on their jobs for rents and other expenses. The pandemic has no doubt brought families together for more than one reason. While some grown kids are coming back home to take care of their parents’ health during the pandemic, others are moving in as they are out of jobs and want to save money during this situation.
Families are under pressure as about two-thirds of parents are now sending money to adult children to handle the expenses during this crisis. Many people have lost jobs and find it difficult to make ends meet on their own. In this situation, it is not a bad idea to depend on parents for some support until they get back their jobs. Children who are not going back to parents are taking help from parents financially to pay for health care, rents, and groceries. Many parents are even providing financial support for the everyday expenses of children. According to a survey conducted about such people, nearly 20% of those adult children who have lost jobs have moved back home to stay with parents. This is something that they did not expect to do before the pandemic, and the economic crisis has forced them to take such decisions.
Unlike the old generation, the millennials have always delayed important milestones in life, like getting married and buying homes. There are many reasons for this, as many of them are burdened with student loans and have financial stress even before they start earning independently. Apart from that, many people remained with their parents for a longer period than the previous generations, and they did not find it necessary to focus on buying homes and settling in life. However, the economic crisis has created havoc in the lives of the young generation as many people in the age group of 25-40 have lost jobs after the pandemic. Most of them have not seen a big recession like this in their lives, and they are finding it difficult to manage the situation on their own. In this situation, families are getting together, as many parents are helping such children to lead a normal life during the crisis.
Experts who have analyzed such situations in the past say that this was seen earlier during the Great Recession, and it is happening again during this pandemic. There are many similarities with regard to the behavior of people during such crisis situations. Whenever such a crisis happens on a large scale, most youngsters do not have enough backup resources to lead a normal life. Given this situation, they will have to take support from friends and family members to sail through the current economic crisis. Some children are also moving back home as they have student debt to clear, and they do not have much savings to rely on during the crisis. Most parents are not complaining, though, as they get to stay close to their kids, and they can bail them out of the crisis somehow.
Financial experts have some suggestions for such families on how to manage the situation. It can be a difficult time for adult children to rely on parents at this stage for financial help, and parents should understand their concerns. In the same way, young adults should also understand that whatever they borrow from parents will hurt their retirement savings in the long run, and they should try to compensate them in some manner. Most parents who are helping adult children are also close to retirement age, and this is something that they should not neglect as it can affect their savings in the long run. Financial experts say that when you are giving up a 401 k savings to help your kids, you should see its impact and give priority to what is more viable at the moment. You should also take care of credit card loans as they come with high-interest rates and avoid using them to provide financial assistance to your children.
It is also important to communicate properly with your children and explain the importance of long term savings. Having a frank discussion about such things will help them to have practical expectations about the situation. They will understand this as they are also dealing with the crisis and want to come out of these things at the earliest. Financial experts also have some suggestions for children who are going back home due to the economic crisis. They can help the parents in some manner and try to take up gig jobs close to their place. This will keep them occupied and also provide them with some money for household expenses. When such things are properly managed, this can actually be a wonderful lesson in life as both parents and children get to face the economic crisis together, and they can strengthen their bonding. It is also the right time for children to understand the importance of savings, and they should make it a point to save money for important things in life. Most youngsters would have already understood its value during this pandemic.
Once the pandemic ends and life returns to normal, most young adults who have been through such a crisis will be careful about their spending. They are likely to cut down on unnecessary expenses and use their credit limits wisely in the long run. Financial experts say that when the crisis is managed with proper communication between parents and children, they can easily get through the problem in the future. It will also provide good lessons to the younger generation about the importance of having savings in the future. In this way, they will be able to face any situation without having to depend on outside help.