In an era where many young people are starting new lives in big cities, signing new leases, 28-year-old Lamar Mangal chose a different path – one that an increasing number of people are following: moving back to live with his father in Milton Keynes, UK.
Mangal works as a client manager at an IT company and said that this decision has allowed him to put up to 80% of his salary into savings and investments. While living with his father, he was able to save about £1,000 (approximately $1,323) per month, and now he can consistently save £1,400 (approximately $1,850) per month.
“My mindset at the time was basically to save as much money as possible,” Mangal said. He mentioned that he has already accumulated a six-figure net worth (at least £100,000) and hopes to retire in his fifties.
While many young people choose to live with their parents due to high living costs, Mangal noticed the difficulty his father faced in buying a house, prompting him to save actively.
“I never want to be in a position where I can’t afford a house,” Mangal said. Although he and his fiancee have moved out since his father moved to the US, he would still be willing to live with his parents to continue saving money if circumstances allow.
An EY survey revealed that globally, more and more young adults (Generation Z and Millennials) are finding it challenging to purchase a home due to skyrocketing property prices and unstable job markets. As a result, they opt to live with their parents to save money.
EY recently surveyed 10,000 respondents aged 18-34 in 10 countries and found that on average, 60% of young people are still living with their parents or guardians.
In South Korea, this percentage is even higher at 78%, with these young individuals commonly referred to as “kangaroo tribe” symbolizing their staying at home like kangaroos in a pouch. In the US, 46% of young adults live with their parents, commonly known as “boomerang kids.”
Alex King, the founder of Generation Money, a financial education company based in London, emphasized that although the practice of “living at home to save money quickly” is becoming more common and socially acceptable, there are still risks involved.
King pointed out, “Many young people initially plan to live with their parents for a few years, save up money, and then move out or buy a house. But once they start saving money, giving up this lifestyle can be very difficult.”
In response to this, King’s advice to young people is:
Consistency is key to saving.
“It’s not about how much money you save,” Mangal said. “The most important thing is to have the determination to save continuously from the beginning and stick with it, which I believe is crucial.”
Balance is crucial.
While aggressive saving has helped Mangal achieve his goals, he now also focuses on enjoying life: “I don’t want to look back and regret that I spent a whole decade living like this, when I didn’t have to work so hard.”
Be cautious of lifestyle inflation.
King warned young people not to become overly reliant on the comfort and luxury provided by their parents, as transitioning to paying rent or a mortgage in the future can take time to adjust to.
Ease the burden on parents.
Try to help parents by sharing some expenses, such as purchasing daily necessities or paying utility bills. This not only aids in cultivating healthy financial habits but also lays a solid foundation for young people to live independently in the future.
(Adapted from a report by Reuters)