Finance personality blames stay-at-home young adults for luxury goods industry boom

Analysts at financial services firm, Morgan Stanley, say that as more young adults are choosing to live home with their parents, they are using the room in their budget to drive growth in the luxury goods industry.

This includes expensive bags, designer wear and filling their wardrobes with 'cheap' and 'easy' buys.

American radio host and personal finance author Dave Ramsey criticised this trend calling it a 'trainwreck' on The Ramsey Show on Saturday 14, 2023.

“So, let me get this straight. You live in your momma’s basement, but you got a Coach purse,” Ramsey says. “Here’s what’s going to happen — you cannot avoid life, it’s coming for your butt. Momma can’t protect you," he said.

Why young adults are choosing to stay home

In the United States alone, according to the U.S Census Bureau data, half of all young adults (18-29) are still living at their parents home. This trend was last seen in 1940.

Over the passed five years, according to Yahoo Finance, multigenerational living has been on a steady rise. Accelerated by the economic shocks of the COVID-19 pandemic with many adults ricocheting back to the nest.

Meanwhile, the hosts on The Ramsey Show claimed this trend is "coddling" and "enabling" these young adults.

Economic shocks from rising rent, inflation and high interest rates have made life out in the "wild" hard. However, some respondents said that this trend is only problematic if the adults don't contribute. Otherwise it is tradition and supported.

"In many cultures multiple generations live under the same roof. There's nothing wrong with it as long as the children have jobs, contribute to the household expenses, and are productive members of society. But if people are living with their parents so they never have to grow up and do anything with their lives then, yes, that's a problem," said one responder by the alias "Okk".

Other factors, according to The Morgan Stanley report, include pursuing higher education and marriage later in life.

"My daughter moved back in with me after her rent was raised 500 a mo. It was either take out student loans or move home. She goes to college and works full time. She has no student debt and is saving to buy a home. The best part, I love having her here. It's not a one size fits all and tired of the talking heads acting as though many of them have a choice." said Tammy.

Weighing in on change

Nonetheless, the show's co-host, Jade Warshaw, said this is prime time to pursue financial independence.

“The problem is you’ve got debt, you’re not earning enough money and you’re not doing enough to go out and change it. Mom and dad can’t do this for you,” he said.

Starting with closing cash outflow and building value for money.

“Listen, $10 is better than nothing. $50 is better than $10, $100 is better than $50. Because really, sometimes $200, $400 can make a world of difference in your situation," said Suze Orman, a personal finance expert.