Trampoline, not a free ride.

Posted On August 31, 2015

Many millennials, like their Gen-X parents and Baby Boomer grandparents before them, are ready to jump right out into the world and get on their own once they leave college. In our culture of independence, there may be a certain social stigma attached to those who continue living with Mom and Dad after they’re finished with school.

CNN Chief Business Correspondent Christine Romans, author of Smart is the New Rich: Money Guide for Millennials, suggests in a recent video for USA TODAY that it’s not a bad idea for newly graduated millennials to live at home for a couple of years, however, while they build – and invest – capital.

“If you have student loans, then you’re saving on rent while you’re paying off those student loans,” she said. “If you don’t have student loans and you’re living with your parents, especially if you’re living in a high-cost (area) … save the money, invest the money and get ready to start out with kind of a trampoline.”

On paper, this makes perfect financial sense, but there are pitfalls to consider.

Is the millennial going to know when it’s time to leave? Not having to pay for rent and utilities can be addictive, and the last thing parents want is for their millennial son or daughter to be still living with them as the twenties push toward the thirties.

Will the avoidance of the trials of paying rent and utilities and maintaining a residence hinder a millennial’s understanding and acceptance of economic realities?

Many employers see millennials entering the workplace with a certain sense of entitlement. They not only seek advantages such as flexible work hours, the latest technology, planned career paths and the freedom to work on things that interest them, the cream of the incoming millennial workforce is increasingly demanding them.

In an economy where many smaller companies are struggling to keep up with even basic necessities such as insurance coverage and larger corporations are simply laying off employees when costs need to be cut, having their own bills to pay may help millennials better relate to the economic realities of the working world they’re joining.

Romans has some suggestions for making a year or two at home work, including written guidelines on the length of the arrangement and transparent reporting of how much is being saved.

It’s also important that the stay-at-home millennial pull his or her own weight in the household. Being in charge of buying groceries or keeping the cars fueled might be one way of pitching in, Romans says. Another idea is being the household “technology CEO,” utilizing the typical millennial’s knowledge of tech products to keep the household up-to-date in its gadgets – and yes, this includes buying the new stuff when the old stuff is outdated.

While it’s not a one-size-fits-all solution, living at home can be advantageous for some. But it needs to be used for its intended purpose – a trampoline, not a free ride.

Categories: Baby Boomers, Generation Y / Millennials