Transitioning from college life to the working world can be a daunting experience for many graduates. Numerous college students struggle with their career path upon graduating and seek guidance for their future whether that be determining if they should live at home, move out, or find a job. While many of these changes impact recent graduates, their parents also need to be prepared, specifically due to the increase in young adults living at home.
Transitioning to Living at Home
College graduates should not be embarrassed to live at home after college as there are many positives to this situation. Job searching can be less stressful since classes have ended and focus isn’t elsewhere. If graduates are employed, they can start building up savings and work on paying down their student loans. According to Pew Research Center, in July of 2020 52% of young adults resided with one or both of their parents. This rate is higher than the peak during the Great Depression era. Much of this was due to the COVID-19 lockdowns as this number has decreased since then, but it is still a more common trend that parents should be prepared for.
We have touched on this topic in the past, but the average federal student loan debt in the U.S was $37,574 in 2022 with student loan debt roughly tripling since 2007. With the unprecedented levels of loan debt these students have today, it has become extremely difficult for new graduates to move out of their parents’ house. One major factor contributing to the rise of graduates living at home is the stagnant nature of entry-level salaries. Despite rising living costs, starting salaries for many professions have not seen proportional increases. As a result, graduates find it difficult to secure affordable housing and meet their financial obligations independently. This can be a big transition for parents as many have not faced the same struggles when they were graduating decades ago. Many graduates face substantial loan repayments immediately after completing their studies. When combined with stagnant salaries, this creates additional financial strain, making it challenging to afford rent, utilities, and other expenses associated with living independently. Graduates who want to move out should seek out roommates to assist with the cost of living and this can alleviate financial strain.
Steps to take for Recent Graduates
- Embrace Continuous Learning: Graduation is not the end of your education; it’s just the beginning. Stay curious and committed to lifelong learning. Seek out new knowledge, acquire new skills, and stay updated with industry trends. This will ensure your continued growth and make you more valuable in the job market.
- Be Open to Different Paths: Your career journey may not follow a straight line, and that’s okay. Be open to different opportunities and paths that may come your way. Sometimes the most unexpected detours can lead to incredible experiences and growth. Embrace flexibility and be willing to explore different avenues.
- Network and Build Relationships: Networking is crucial for professional success. Attend industry events, connect with professionals in your field, and maintain strong relationships. Build a network of mentors, colleagues, and friends who can offer guidance, support, and potential job leads. Remember, sometimes it’s not just what you know, but who you know.
- Seek Mentors and Learn from Others: Find mentors who can guide you in your professional development. Seek out experienced professionals who can share their insights and knowledge. Learn from their experiences and seek their advice when faced with important decisions. Mentors can provide valuable perspectives and help you navigate the challenges of your chosen career path.
- Take Risks and Embrace Failure: Don’t be afraid to take calculated risks and step out of your comfort zone. Sometimes the greatest rewards come from pushing yourself beyond what you thought was possible. Embrace failure as a learning opportunity. Each setback is a chance to grow, learn, and come back stronger. Don’t let fear of failure hold you back from pursuing your dreams.
- Develop a Strong Work Ethic: Success is not solely based on talent or intelligence; it also requires hard work and dedication. Cultivate a strong work ethic and demonstrate your commitment to excellence in everything you do. Be proactive, go the extra mile, and take ownership of your work. Your efforts will be noticed and rewarded.
- Adapt to Change and Embrace Challenges: The professional world is dynamic and constantly evolving. Embrace change and be adaptable. Develop a mindset that embraces challenges as opportunities for growth. Stay agile and open-minded, and be willing to learn new skills and adapt to new environments. Your ability to navigate change will be a valuable asset in your career.
- Balance Ambition and Patience: It’s natural to have ambitious career goals but remember that success takes time. Be patient and realistic in your expectations. Focus on building a solid foundation, gaining experience, and continuously improving yourself. Rome wasn’t built in a day, and your career won’t skyrocket overnight. Stay committed and keep working towards your goals.
Remember, this transition is a learning process for both students and parents which requires self-exploration, skill development, and research. By offering support, guidance, and understanding, recent graduates and parents can navigate this exciting phase in their life successfully.
Presented by the Financial Planning Committee of Lake Street, an SEC Registered Investment Adviser
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