STEVE INSKEEP, host:
On Fridays, the business report focuses on your money. And today we continue our look at the financial habits of young adults.
Many young adults do not save. That's no surprise, but you may not realize that this may hamper their parent's efforts to save.
NPR's Lisa Chow explains.
LISA CHOW reporting:
Sean Carmady(ph) is 27. He's a wage earner. He's just proposed to his girlfriend of four years, and he lives at home with his folks.
Mr. SEAN CARMADY: When I was younger, I always thought I'd be out of here by 21, 22. But it just doesn't work out that way.
CHOW: Sean makes $30,000 a year as a manager at a hardware store. He saves money, but his spending vice is travel.
Mr. CARMADY: I suppose if I avoided a few trips here and there that I may be able to afford to move out. But, you know, I'm just having too much fun. I can't really pass those opportunities up. You know, I want to live life.
CHOW: A Federal Reserve survey shows the financial savings for people under 35 has fallen in recent years. Their income is also down, but their savings in the form of bank accounts, bonds, stocks, and retirement accounts, has dropped by even more.
Sean's sister, Lauren(ph), who's 25, also lives at home.
Ms. LAUREN CARMADY: Ideally, would I be here? No. I would love to move out. But I just can't afford to do it.
CHOW: Lauren works at a PR firm making $40,000 a year. A chunk of her salary goes to paying down school loans and credit card debit. Then there's saving for a new car. The rest is for normal stuff.
Ms. L. CARMADY: We do spend money just going to bars, going out to dinner. We take vacations once a year. We went to the Bahamas two years ago. Oh, and I love to shop! I'm guilty of always wanting something new.
CHOW: The two working adults, their parents, and younger sister, Meghan(ph) -she just graduated from college - live in this three-bedroom house in Connecticut. It sits on a small street in the woods in a town with three traffic lights.
Mr. S. CARMADY: My parent's bedroom is here.
CHOW: Sean, Lauren, and their mom and dad live on the second floor. Meghan lives on the first floor. Down in the kitchen, their mom Cindy(ph) has just baked scones. The house has a sweet smell.
Mr. S. CARMADY: Um, our sister is the only one who's on this level. She lives in this room.
Ms. CINDY CARMADY (Mother): Hello! I'd like to add to that. That really is my dining room.
CHOW: Cindy Carmady turned the dining room into a fourth bedroom after her daughters decided they couldn't share a room any more.
Ms. L. CARMADY: They always say, you know, we were out of the house by now. You know, we were married, on our first child at this point. And was it comfortable? No. But you get through it. So, like, do I feel I'm a little bit spoiled by being in my house and it being so comfortable? Maybe. Could I actually move out if I wanted to? Sure. If I wanted to live somewhere that, you know, didn't meet my standards, then yeah.
CHOW: Census figures released last week showed that among 25 to 34 year old women, 1-in-12 lived with their parents last year. The number was greater for men of that age, where 1-in-7 lived at home.
Lauren and Sean do pay their parent's rent, but its way below the market rate.
Ms. C. CARMADY: The $150 doesn't even cover their groceries.
CHOW: Cindy says it's not going to go a long way taking care of their retirement either. She and her husband are each 55 years old. Together they make $90,000 a year.
Ms. C. CARMADY: We have started thinking about putting more money aside for retirement, because we don't want to go through what we've seen our parents go through; when you live longer then you thought you were going to, and the money just, you know, runs out. But right now, we really can't increase what we want to save, because we are just able to get by with what we have.
CHOW: So far, the couple has saved only $40,000. The husband, Tim Carmady, loves his job and doesn't expect to retire anytime soon. Having his kids around makes him feel young. And he says he's willing to sacrifice his future so they can have a better one.
Mr. TIM CARMADY: The whole point of this is to have the next generation be better off then you were. And that's what we're striving for. To have them reduce their expectations, even if it's in the short term, that's hard to compromise.
CHOW: So, Tim and Cindy Carmady are subsidizing their kids' lifestyles by borrowing against their own future. The parents do have one important growing asset - their house. And it may be this house, the one they've shared for 20 years, that becomes their saving grace.
Lisa Chow, NPR News. Transcript provided by NPR, Copyright NPR.