Email your money conundrums, from the technical to the psychological, to email@example.com
I am 20 and currently live with my parents for free. I work full time and pay my own bills, and also help shuttle my younger siblings around to school and activities. Because I don’t pay rent, I am able to pay bills on time, go out, travel, and generally enjoy life, but I can’t stop this nagging feeling that I’m a failure because I still live at home. I see my co-workers and friends struggle to get by and live paycheck to paycheck, and they just seem so miserable. At the same time, I know that I can’t live at home forever. Should I suck it up and find my own place?
The question isn’t “should” you move out of your parents’ house, but when — and how to do it gracefully. In the meantime, there’s no reason for you to feel like a failure for sharing a roof with your family, especially at age 20, and especially while you help out around the house and work full time. If you were loafing around all day eating your parents’ food and using their cable, I’d understand if you felt a little guilty or aimless. But what you’re doing is downright responsible. Think of this time at home as a solid runway for a strong, smooth takeoff when you leave — to make the best use of it, you need to know its boundaries.
When I was 22 and caught up in the excitement of starting my adult life, I signed a lease that I couldn’t really afford. I remember standing in the shower of that apartment, watching the water swirl down the drain and thinking it was a metaphor for my bank account — the anxiety of living beyond my means was acute. The following year, one of my roommates moved back in with her mom to save money for grad school; another peaced out mid-lease to regroup at her parents’ house after getting laid off. Another roommate after that brought a surprise addition: her younger sister, who shared her bedroom. Meanwhile, at my first job, many of my older co-workers were still shacking up with their families — except for my 29-year-old supervisor, who lived with his girlfriend and her grandparents. The point is, cobbling together one’s financial independence is a messy, inconvenient process, and never happens in a vacuum. What’s more, launching yourself out of the nest and hoping you land on your feet is not the wisest strategy — take it from me.
Also, bear in mind that your living situation is completely normal: The percentage of young Americans (ages 18 to 34) living with their parents recently reached a 75-year high of almost 40 percent. Most economists attribute this to rising rental costs and student debt, but if you broaden your view, one could see this trend as more of a course correction; in most other cultures and countries, it’s par for the course to live at home until your mid- to late-20s. And why not? Combining resources with a family unit isn’t just efficient, it’s nice — while there’s a huge satisfaction to being independent, being accountable to those you love feels great, too.
That said, you’re right — you will have to live without your parents someday, and if you’re feeling the itch, that’s an important sign.
Your first step is to plot out the numbers. Amanda Clayman, an L.A.-based financial therapist, recommends that you create a “mock budget” and start saving the equivalent of a rent check every month. The amount should be based on the cost of the apartment you hope to have — research the local market and do the math. Ideally, you’ll have at least three or four months’ rent saved up before you actually move. “By ‘practicing’ these payments, you have some wiggle room to make mistakes or adjustments, as opposed to being forced into a situation where if you fall short one month, you could damage your credit or lose the lease,” she says. “This phase is like training wheels.”
Next, figure out where your parents stand. Considering that you didn’t mention them in your letter, I’m guessing they’re happy to have you around, particularly since you’re helping with your siblings. Still, I recommend coming up with your own plan before you broach the topic with them. “There’s always the chance that when you bring it up, your parents will say, ‘We would love for you to pay us rent. Let’s start this month!’” says Clayman. “If you come to them with a clear timeline, some established savings, and a strong idea of what you want, that’s something most parents can get behind. They’re more likely to be supportive when they see you’ve taken initiative already.”
Conversely, your parents might be more reticent to see you off than you’ve anticipated, so be sensitive. “Don’t spring it on them when they aren’t suspecting it,” says Kimberly Palmer, a personal-finance expert from NerdWallet. “Let them prepare by telling them you’d like to chat about your arrangement.” Be sure to allow time to listen to their concerns, too. “It’s possible that your parents feel they are benefiting from this situation as much as you are,” says Palmer. “If they’re worried about missing you, promise to come home for dinner once a week; if they don’t want to lose the carpool help, perhaps you can still do that on occasion.”
You’ll also want to take this time to set up good financial habits, more broadly. Your early 20s are a crucial time to start investing for retirement, ridiculous though it may seem; aim for the 50/30/20 budgeting method (50 percent of your take-home income goes to necessities, like rent and food; 30 percent goes to “wants,” like travel and restaurants, and 20 percent goes to savings and/or debt payments). As for that three to four months’ rent you’re about to save up? Sock it away as your “emergency fund,” and keep contributing to it until you have three to six months’ worth of living expenses, just in case.
Moving out of your parents’ home is a major step, but if you do it thoughtfully, it can set you up for a much more solid financial future. “I think our culture sometimes pushes people to try to become independent too fast, and then we remain in this sort of proto-adult stage for a much longer time because of it,” says Clayman. “To know that our families are there for us, even if we’ll never need it, is extremely healthy, and can actually make us more mature in the long run.”