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Financial nihilism

Even if you are not a personal finance reporter, odds are personal finance stories are peppered throughout your beat. If you cover real estate, retail, banking, investing, or the economy, the personal finances of consumers impact your beat. So this week, let’s talk about the personal finances of young Americans.

Moving back home with Mom and Dad

Young adults, those between the age of 18 and 34, are now living at home with their parents at rates not seen since the 1940s. According to a recent Pew study, about a third of young adults are currently living with their parents. The latest U.S. Census Data also shows that almost half of Americans between the ages of 18 and 29 were living with their parents in 2022.

A combination of the pandemic, inflation, student loan debt, and rising housing prices have all contributed to young adults moving back in with their parents to improve their financial situation. And it’s not just young adults in the U.S. – a similar trend is happening in the U.K.

Saving money on essentials and splurging elsewhere?

Morgan Stanley analysts wrote in 2022 that they viewed young adults living at home as “fundamentally positive” for the luxury industry. According to the Morgan Stanley report, “When young adults free up their budget for daily necessities (e.g. rent and grocery), they simply have more disposable income to be allocated to discretionary spending.”

Luxury brands, such as Louis Vuitton, Dior, Burberry, Hermès, Tiffany, and so many more, saw sales jump in 2022. Enough so to prompt The Guardian to write that Gen Z appeared to be going through their own “roaring twenties” with no mortgages to pay and a YOLO (you only live once) mentality. Of course, there is always more to the story and it shouldn’t be assumed that all young adults are living at home just to buy a new Hermès Birkin bag.

Financial nihilism

An article in Bloomberg last fall reported a trend of “financial nihilism” among young adults, which include Gen Z and many younger Millennials. Financial nihilism is an expression first talked about in 2021 by Demetri Kofinas, the host of the podcast, Hidden Forces. If you haven’t yet heard the term, it has been slowly making its way around social media and is essentially the thought among young adults that the “American Dream” is a scam. Basically, the cost of living is so high for young Americans that they’re simply giving up, believing the system is rigged and bucking the financial advice of previous generations as irrelevant to them.

Young adults are saying no to college and its high costs, unabashedly working remotely from their childhood bedrooms, and accepting that living with their parents is simply the new normal. Similarly, many Millennials have accepted that they may never own a home and will be forever renters.

The oldest Millennials are now entering their 40s, but according to the data they’re only “80% as wealthy as their parents were at the same age,” and almost half are living paycheck to paycheck. After adjusting for inflation, housing prices are 50% more for Millennials than Baby Boomers but wages have only risen 20%. Therefore it is no surprise that Millennials who haven’t yet bought a home feel like that goal is no longer a reality. As the reporter for Bloomberg wrote, “For many, the American Dream is more like an American illusion.”


  • Julianne Culey

    Julianne is the Assistant Director of the Reynolds Center with expertise in marketing and communications and holds a master's in Sociology from Arizona State University.

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