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When Gen Y moves back home CUs have opportunities
MADISON, Wis. (8/21/12)--If you are marketing by lifestyle geared toward life's big events-- birth, graduation, the first car, college, marriage, kids ,home buying, pre-retirement investing, and retirement--you may see an opportunity in the latest trend: Gen Yers moving back home and living with their parents.

Findings by a new study from US2010: Discover America in a New Century may shake up some marketing habits--or at least make marketers reconsider their assumptions about who does what and when.

Marriage, children and families are no longer individual achievements that young people rush to pursue, the study concluded. It noted that the transition to adulthood has been extended as a period of "emerging adulthood, marked by personal instability."  Young adults stay in their parental homes longer or return home after a stint of independent living.

Although the Great Recession affected nearly every demographic population segment in the U.S., young adults were hit the hardest because they were often the "last hired, first fired." Job losses mean many young adults found it comforting to double up with their parents to save money. "For young adults, various transitions and uncertainties often make the parental home as a safe haven," said the study.

Some of the key findings:

  • Of those age 20-34 in the survey, 24% lived with their parents during 2007 to 2009, up from 17% in 1980. The percentage was much higher for those under 25 years old: 43% moved in with the folks, compared with 32% in 1980. Levels of co-residence were higher for men than women, minorities more than whites, and for those with lower levels of education.
  • Delays in marriage increased the likelihood of moving back in with parents. In 2007-2009, roughly 38% of men and 47% of women aged 25 to 29 were married, a decline from 59% and 65%, respectively, in 1980.
  • Two key factors explain why young adults are living with their parents: marital status and economic reasons. Singles are more flexible in terms of moving in and out. And unemployment or low income makes independent living difficult, so doubling up with parents becomes feasible.
It is no surprise that never-married individuals had the highest percentage living with parents, said the study. About 54% of the 20-24 year olds, 37% of the 25-29 year olds, and 27% of the 30-34 year olds lived with their parents in 2007 to 2009.  "What is surprising is the high percentage at older ages when they are expected to have reached independence. More than one-fourth of 30-something adults never left home or moved back into their parents' home."

So, how does all this affect the credit union's marketing strategy? Think education opportunity. Provide resources families can use. Here are a few possibilities:

  • Articles in the credit union's newsletter. Offer tips for negotiating a contract much like a rental contract, specifying the move-in terms and what the offspring and parents will or will not contribute.
  • Financial fairs. Make this situation one of the topics. Many parents welcome their offspring back but then reality hits. Who pays for the jobless daughter's emergency car repair?  What are the financial consequences if the son or daughter gets sick or is injured and isn't on the parent's health insurance plan? What if they never move out? Credit unions can help them weigh the pros and cons.
  • Budgeting help for the new reality. During the recession, many young adults and their parents received a wake-up call. They are being forced to reevaluate their goals and financial capabilities. They may need help with considering options (how best to stretch the pre-retirement dollars, buying a used car instead of a new one, a shorter vacation than the two weeks in Italy).  Provide them the tools to reevaluate their budgets and calculate all the what-ifs.
  • Special savings plans and loans. Maybe an emerging adulthood loan to finance the start up expenses of renting at a new place, or savings plan attached to a loan that rewards the young adult for saving.
The possibilities are endless, with just a few tweaks to a credit union's marketing.


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