Economic Crisis Unintended Consequences: Moving Back with Ma and Pa…And Grandma and Grandpa.

There may be a bright spot in some of this economic mess.  All that McMansion inventory may be suited to housing extended families.  Many people are now finding out that it isn’t too late or too early to move back with your extended family because of economic reasons.  Here in California, we’ve heard many stories of recent college graduates who moved back home because they couldn’t find work.  But here we have established workers suddenly losing their jobs and needing to find a way to make ends meet:

“(LA Times) Then, a few months ago, more change: Augustine lost her $60,000-a-year job as a manager at a hardware store. Garcia, trained as an electrician’s assistant, could find no such work following the collapse of the housing market, so he started driving a tow truck. Now he and Augustine, he says, owe money to her mother because they haven’t been able to help much with household expenses.

“It’s hard because I’ve been living on my own since I was 17,” Garcia says. “We went in like roommates — we wouldn’t be in her business, and she wouldn’t be in ours. She lived here alone for the last six years, and to have her son-in-law and daughter back — I’m sure it’s been hard on her not having her own privacy.

First, the subprime meltdown and housing market collapse, then the woes on Wall Street, now mounting layoffs. Each has contributed to a phenomenon that many Southern Californians never imagined they would have to face: moving back home with mom or dad after years — sometimes decades — of being on their own.”

A double whammy.  The AARP estimates that 25% of foreclosures in the second half of 2007 occurred to those who are 50 years and older.  And we are also going to see a reverse push as well because you will have parents in many cases assessing the damage done to their 401k or other retirement plans in the last few months.  Much of this is not reflected in the longer term data.

Who would have thought that the housing crisis would actually bring some families closer together?

RSSIf you enjoyed this post click here to subscribe to a complete feed and stay up to date with today’s challenging market!

TAGS:




LEAVE A COMMENT

Subscribe Form

Subscribe to Blog

My Budget 360

Enter your email address to receive updates from My Budget 360:

100% Private & Spam Free.

 


Subscribe in a reader

 

Popular – All Time


  • 1. How much does the Average American Make? Breaking Down the U.S. Household Income Numbers.
  • 2. Top 1 Percent Control 42 Percent of Financial Wealth in the U.S. – How Average Americans are Lured into Debt Servitude by Promises of Mega Wealth.
  • 3. Is college worth the money and debt? The cost of college has increased by 11x since 1980 while inflation overall has increased by 3x. Diluting education with for-profits. and saddling millions with debt.
  • 4. The Perfect $46,000 Budget: Learning to Live in California for Under $50,000.
  • 5. Family Budget: How to go Broke on $100,000 a year. Why the Middle Class has a hard time Living in Expensive Urban Areas.
  • 6. Lining up at Midnight at Wal-Mart to buy Food is part of the new Recovery. Banks offering Mattress Interest Rates. The Invisible Recovery Outside of Wall Street.
  • 7. You Cannot Afford a $350,000 Home with a $75,000 Household Income!
  • 8. Crisis of generations – younger Americans moving back home in large numbers. Student loan default rates surging largely due to for-profit college expansion.
  • 9. The next massive debt bubble to crush the economy – 10 charts examining the upcoming implosion of the student loan market. $1 trillion in student loans and defaults sharply increasing.
  • 10. Welcome to the new model of retirement. No retirement. In 1983 over 60 percent of American workers had some kind of defined-benefit plan. Today less than 20 percent have access to a plan and the majority of retired Americans largely rely on Social Security as their de facto retirement plan.
  • Categories

    Archives