How Adult Kids Can Make the Most of Living With Their Parents
If you are in your twenties or early thirties there is a high possibility that you are living with roommates. There is an equally high possibility that your roommates are much older than you, go to bed at a reasonable hour during the week (possibly the weekend as well), and have pictures of you all over the house. Yep, your roommates are your parents.
This is becoming somewhat of the normal process with young adults. Step one: graduate from college. Step two: get a job. Step three: move in with your parents. In fact, a report from the U.S. Census Bureau states that young adults living at home is at an all time high.
There is no reason to hang your head. For many millennials, cash isn’t exactly raking in with each paycheck. According to the National Association of Colleges and Employers, the average starting salary for the graduating class of 2014 was just about $45k. Sounds great, right? Well keep in mind the insurmountable issue of paying back student loans. You can learn more about the problems associated with the student loan bubble here. If you need tips on how to pay back your student loans just read this article.
With paying back student loans, bills and other monthly financial responsibilities, it could be difficult for young adults to reach financial stability. It is becoming increasingly difficult for millennials to even reach a point of comfort.
There is no shame in living with your parents. The only stigma that occurs is when a young individual lives with their parents without any exit plan in place.
Unfortunately, this happens too often. The convenience of living with one’s parents leaves them taking advantage of the situation— or worse— irresponsible spending is leaving them with no option of reaching a state of independence.
If you are living with your parents or plan on moving back in with your parents, follow these steps to help you save money and leave the nest sooner rather than later.
Pretend You Are Paying Rent
The extra cash looks great in your account. It sits there tempting you to travel when you want to, go out during the week, or to simply buy your lunch every day. Why not? After all, you aren’t paying rent each month or paying cable or utilities.
But don’t spend just yet. Living with your parents provides an awesome opportunity to save money. One of the best ways to do this is to pretend you are paying rent.
Do a little research and find out what you would be paying monthly for a local one bedroom apartment. One that you could afford monthly. Whatever that amount may be, put it in your savings and don’t touch it. Sure it will limit how much you can spend on entertainment and other nonessential items. But trust that it will be worth it.
Many young adults find themselves having difficulty buying a home, a new car, or even getting married because the funds aren’t there. Now is the perfect time to help yourself out.
Focus on Building Your Credit
Statistics show that millennials have the lowest average credit score. You can learn more about that here. This means that millennials have higher interest rates, pay more in fees and are viewed as a greater financial risk.
There are many reasons that could factor into low credit scores. Whatever it may be, a low credit score poses many problems in the near and distant future.
Focus on building your credit score by finding the right credit card and using it effectively. Don’t shy away from using a credit card for your purchases. Just make sure that you are taking advantage of what your credit card is offering. Only make purchases on the card that you know you can pay off in full.
Focus on making large payments to your student loan debt. Your federal student loan can help you build your credit. Making large payments on time every month to your loan can bode well for your credit score.
Do your parents or another family member have excellent credit? They can add you as an authorized user allowing you to benefit from their trustworthy activity. You will have access to that line of credit and you are legally required to pay your purchases. But the main reason this benefits you is you will now be building a healthy history of credit.
Focus on a Goal
Start developing a plan on what you will do once you venture out on your own. Are you going to buy a home? Are you going to get your own apartment? Buy a new car?
Do your research on what it takes for each of your goals. If you are going to buy a home find out where your credit score needs to be, what type of loan you will be getting, how much money you will initially need for a down payment.
Whatever your goal may be, develop your plan on how you are going to reach it. Continuously remind yourself of these goals and keep yourself accountable daily. A lack of a plan and goals will leave you shacking up with your parents for a long time. Your parents may love you unconditionally, but they really want you out of their hou
