eHealthInsurance’s recent study reveals that many fresh college graduates may experience a harsh wake-up call when confronted with the reality of their potential earnings in their selected career fields. Their anticipated income tends to be considerably less than what they initially imagined. Moreover, only about two-thirds of those surveyed are fortunate enough to land a job.
With student debt now exceeding credit card debt as the largest financial obligation for consumers, many 2012 graduates who earn less than they aimed for are choosing to extend their stay at their parents’ home.
Another study by Rutgers University researchers indicates that due to college debt, 40% of recent graduates have postponed making significant purchases, including homes or cars. Additionally, over a quarter have deferred continuing their education or have moved in with relatives to save money.
These surveys highlight that both recent graduates and their parents, who hoped for a secure future through college education, often find themselves requiring financial assistance before they even start their careers.
Over $1 trillion in student loans remain unpaid across the nation. The looming interest rate on federal student loans could double to 6.8% on July 1 if Congress doesn’t maintain the current low rate. This is a concerning prospect for recent graduates and their parents, who will likely need to support them financially.
Many graduates, initially full of optimism about making a significant difference while earning high salaries, find themselves having to accept jobs unrelated to their field just to meet their daily expenses. They often have to work multiple jobs to reduce the debt they acquired throughout college.
As these graduates return home, it is crucial to establish guidelines and expectations. Implementing a contract articulating the roles and responsibilities of every adult in the household is an effective strategy to set limits and anticipate future adjustments.
Here are some suggestions to foster a harmonious living environment:
– Establish clear rules: Formalize the guidelines so everyone understands the expectations.
– Require contributions: While they might not afford to live independently, it doesn’t mean they live at your home free of charge. Calculate an affordable amount that will help cover extra expenditures like utilities, food, etc.
– Encourage responsibility: Just because they’ve moved back doesn’t make you in charge of their meals or laundry. They should be capable of taking care of themselves, just as they did during their time at college.
– Set a set moving-out date: Setting a deadline might seem harsh but it reinforces the idea that they need to attain financial independence.
In today’s tough climate for graduates, high levels of student debt, significant unemployment, and inflation might make stepping into the “real world” seem daunting. While it’s essential to offer them support, it’s equally necessary to encourage them to become independent, unless you want them to stick around until your retirement.
