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Millennials: Financial Independence a Priority

7-4 millennialsEarlier this month, Joseph Melendez, CEO of ValueInsured [1], spoke with MReport [2] regarding how four in 10 parents say they plan to help their children buy a home, but a recent study shows that millennials think they should pay for their bills earlier than their baby boomer counterparts.

Bankrate.com [3] asked millennials, Generation X, Baby Boomers, and the Silent Generation what age people should be able to pay for their own bills, including housing. Come to find out, millennials are not as easy on themselves as media makes them out to be. Millennials thought that people should be able to pay for their own housing at the age of 22, their own car at 20 ½ and their own cell phone bill at 18 ½. This is a year and a half younger than Baby Boomers reported.

"Millennials are often stereotyped as being entitled," said Sarah Berger, author of The Cashlorette at Bankrate.com. "It's refreshing to see that millennials really do have high expectations of gaining financial independence and getting off their parents' payroll."

There were political and regional differences in the data, too. On average, Republicans believed that a person should be able to afford their own car three years earlier than the average Democrats response. Northeasterners thought housing costs should be shared with the parent until the age of 24 ½, two years longer than Midwesterners, 1 ½ years longer than southerners and almost a year longer than westerners.

Cutting free from the support of parents is based on many factors including income and student debt load. For some, they may need to move back in with parents temporarily, others are ready to travel the world.

According to Melendez, this travel aspect makes it hard for parents who do not want to lose their money if their child needs to move for a new job and the market happens to have a temporary downturn.

Others, like Jessica Bergman, a 25-year-old college graduate, have agreements with their parents in order to pay their debt and eventually be independent.

“I lived at home and worked for two full years to pay back my loans before I moved out on my own,” Bergmann told Bankrate. “It was the smartest move—the school I was teaching at was a 25-minute commute, so I checked my pride and did what was needed financially.

Though there are different paths for everyone, knowing the younger generation is ready to take charge of their finances, and do so at a younger age in the housing market, is a promising outlook to the future.

For further details on this survey, click here [4].