For the first time in 130 years, adults age 18-34 are more likely to be living at their parents’ home than in their own home with a spouse or partner. The margin is only 32.1 percent to 31.6, but we haven’t been in this position for a long time. Men are more likely to be at home 35 to 28 percent of the time, while women are currently living more on their own at 35 to 29 percent.
If you’re now back at home, take advantage of your time by preparing for the day when you will be able to leave in good financial standing.
1. Increasing income
Here’s looking at you recent graduates. Find that job you can make into a career and get the paycheck that will allow you to live on your own, save on your own and make your own financial decisions. If you are already in a job you love, but the math hasn’t worked out yet, find part-time or freelance opportunities to make extra money on the side to get ahead of your finances. Get far enough ahead and you’ll be on your way to living on your own in no time.
Create a budgeting and tracking habit NOW. Living at home can seem like a safety net. Use it for your benefit. Create a plan, track your expenses and keep tightening your belt. Get used to making decisions on what you can and can’t afford, while you don’t have large expenses coming at you. Learning how to plan for your income and savings and track your expenses so you can save and live on a tighter income when you move out is invaluable for the rest of your life. Need help budgeting? Download Mvelopes today.
3. Saving for down payment/other large expenses
Part of living within your means requires putting money away for savings − lots and lots of savings. Put 10 percent away right when you get paid and put away whatever your budget keeps you from spending as well. If you’re back at home to help pay off debt, you can use some of that extra money for that purpose as well. A down payment on a house or buying a car in cash will be within your grasp.
4. Use credit wisely
Yet another habit to learn while you have a safety net. Don’t put anything on a credit card you can’t pay off by the end of the month. Make sure you know the dangers of credit and train yourself to not reach for the plastic when your budget comes up a little short. When you have more expenses to worry about, using or not using credit wisely will determine how much extra debt you’re carrying around.
As for the debt you may be carrying around, pay it off and don’t take on any new debt. If that means not using credit cards then make that change.
5. Take advantage of the “unique” opportunity
Learn something from your parents or whoever else you’re living with. Just because you have known them your whole lives doesn’t mean they don’t have new stories to tell or guidance on making good financial decisions.
6. Help out
You’re probably at home because it was the best option for you or for your family. Either way, give something back, whether you’re required to pay rent or not. Cook for everyone once in awhile, don’t treat your bedroom like a studio apartment, don’t be that guy in his mom’s basement.