my two cents

‘Should I Keep Living With My Parents to Save Money?’

Photo: Marisa Rastellini/Mondadori via Getty Images

Before the pandemic, I had a pretty good life in New York City, even though I could barely afford it. I definitely wasn’t saving money besides the small amount I put in my 401(k), but I was making it work and paying my student loans and rent and whatnot. I also had some credit-card debt, but I was paying it down. Then, last spring, I gave up my lease and moved back home with my mom and stepdad in Illinois. I was very fortunate enough to keep my job and work remotely. Needless to say, this has saved me a ton of money. I paid off all my credit-card debt, increased my contributions to my 401(k), and saved a little over $20,000 because I haven’t paid rent or student-loan bills or done much of anything for a year now.

At this point, I am beyond ready to move back to New York. My employer is allowing people to return to the office in limited numbers, but it’s not mandatory. Both my mom and stepdad think I should stay with them longer to save more money and pay down my student loans. (My stepdad, who is an accountant, keeps telling me that this is an “opportunity of a lifetime.”) I get along with them well, and it’s fine here. But I feel like my adult life has been on hold. I’m 29, and I miss New York! Is it stupid for me to forgo the savings opportunities that I have here just to move back? Or is there a certain amount I should save before I do it? I know that this is a lucky problem to have, but I feel like I owe it to my parents, like a thank-you for housing me all this time, to do this responsibly. 

This is a lucky problem to have, but it’s also a tricky one. On the one hand, your stepdad is right — staying at home is objectively the better financial choice, and it’s rare to get a chance like this to sock away money that will serve you for the rest of your life. But on the other hand, you still have to live your life, and at a certain point hoarding cash defeats that purpose. How do you walk that line?

It’s great that you’ve taken this time to pay off credit-card debt and pad your savings account. And congratulations — it sounds like you’re on your way to the elusive trifecta of early financial security: No credit-card debt, a healthy emergency fund, and the ability to contribute generously to your retirement savings. It took me a while to reach that point myself, and for what it’s worth, living in New York was much more fun once I did.

To figure out your next steps, I talked to Tiffany Aliche, a financial educator and author of the best-selling book Get Good With Money. She had a similar path to yours, albeit under different circumstances: She had to move back in with her parents at age 29 after she lost her job and her home in the 2008 recession, and recommends that you think carefully before you strike out on your own again. “Just because there’s excess in your budget doesn’t mean that you should move out. It means you should ask yourself: ‘What are my desired outcomes?’” she says. “At the same time, don’t fall into the trap of saving money just to save money. That’s not much of a long-term motivation. Instead, our money choices should be purpose-driven.”

Indeed, focusing too much on saving money can actually backfire, says Clinton Gudmunson, who studies financial socialization and economic pressure at Iowa State University. “The academic literature shows that when a quest for money becomes the central focus and purpose in a person’s life, it hurts their well-being,” he explains.

That said, Gudmunson also advises that you think more specifically about why you want to move now. “Are friendships and romantic interests falling apart because you cannot be in New York? Are you giving up other opportunities by staying? Give specific reasons, and not just vague notions that being in New York is ‘living the dream.’ If that’s the case, I would advise to wait and save more.”

But set a clear timeline. Research suggests that people are much better at saving consistently if they have a clear vision of what they are saving for — in your case, it could be a place of your own, instead of living with roommates. “Give your money a job to do,” says Aliche. “Like, ‘This money is to buy an apartment in ten years.’ Or, ‘This money is to keep me from having to move back in with my parents again if I lose my job.’” Those goals can always change, of course, but mapping them out will give you something real to work toward, even if it’s a ways off.

One other important point: Try not to think of your adulthood as being “on hold” because of your current situation. “Reframe your view of this time at home with your parents as part of an overall life trajectory,” says Gudmunson. It’s not a detour; it’s a major step that’s enabling you to make mature, responsible decisions.

As for the more concrete, immediate stuff: Aliche also recommends checking off a few financial boxes before you relaunch yourself. For starters, if you go back to New York, will you be able to maintain your $20K emergency fund and cover the cost of your move? (Financial advisors say you should keep three to six months’ worth of expenses in cash, depending on how stable your industry is, just in case you lose your job unexpectedly. $20K sounds like it should be plenty, but run the numbers just in case.)

Secondly, will you be able to comfortably pay your rent and student-loan bills once they restart? I wouldn’t worry much about trying to plow through your student debt ahead of schedule; as long as the interest rate is low (around 5 percent or less), then you should be fine plugging away at the regular pace. And finally, can you keep contributing to your 401(k), ideally about 10 percent of your salary? Draw up a budget and see how it looks.

If you’re confident about all of the above, then move on out! It’s true that the rent deals are pretty good here these days. And if you realize that saving for a few more months will give you more security, that’s great too. You’ll be that much happier — and more prepared — to move back knowing that you’ve taken full advantage of the time you’ve been away.

‘Should I Keep Living With My Parents to Save Money?’