Most twenty-something adults are itching to move into their own place. It has nothing to do with the relationship they have with their folks. They might enjoy spending time with family, but on the other hand, they want their own space and independence. For young adults graduating college, the thought of moving back home might leave a bad taste in their mouths. But there are compelling reasons to live at home in your 20s, regardless of what anyone might say.
Living at home as an adult doesn’t mean you’re lazy or looking for a free ride. If truth be told, you might simply be a victim of circumstances. The recession might be over, but the aftermath hit the millennial generation the hardest. As a result, many young adults face unemployment, lower net worths, and they have more student loan debt than any other generation. Because of this financial picture, some twenty-something adults have no choice but to share a space with their parents.
According to a 2012 Pew Research Study, 36% on millennials lived at home with their parents, which included about one-third of college students. In addition, about 29% of millennials between the ages of 25 and 34 are considered boomerang kids, meaning they’ve moved out, only to return home.
Living at home while approaching your mid to late-20s may not be the ideal situation, and maybe you envisioned a different picture for yourself. However, if your parents are agreeable to the idea, here are reasons why it’s okay to live at home.
Pay off student debt before jumping into a mortgage
The average student loan debt for the class of 2015 was a little more than $35,000. There are different repayment options available to graduates. If you graduate owing the average amount and you choose a standard 10-year repayment term with a federal loan, on the low end you’re looking at monthly student loan payments of about $300.
Depending on your degree, your entry-level salary may not be anything to get excited about. So if you jump from college directly into a new job, new apartment and a new car payment, these expenses might be too much to handle all at once—especially when you factor in student debt payments and other debt.
This doesn’t mean you can’t handle these expenses. Many twenty-something adults live independently of their parents. But if you have the option of living at home a bit longer and dropping a large percentage of your income on student debt, why not take advantage of the opportunity? You can pay off debt—or pay it down—before jumping into a mortgage and bigger expenses.
This may be your only chance to build a sizable cash reserve
Everyone needs an emergency savings account—no ifs, ands or buts about it. Financial experts recommend a cash reserve of six to eight months, and we’re all encouraged to pay ourselves first and save 10% of our salaries. This is much easier said than done. But you can jump start your personal savings and retirement savings by bunking with your parents for a couple of years before getting your own place. The cost of living on your own could be more than you realize. Being independent isn’t only about paying your rent or mortgage. You have to budget for utilities, transportation, food, insurances and home maintenance.
If you’re living at home rent-free or paying very little rent, there’s a greater opportunity to build a cash reserve while paying down student debt. Your parents may only ask that you contribute a small percentage to the grocery bill, and your rent may include the cost of electricity, gas, water and the Internet.
You can take your time and find the right job
If you’re eager to find a place quickly after leaving college, you might take any job that comes your way regardless of whether it’ll make you happy. I understand that we do what we have to do; and sometimes, paying the bills requires taking a job that isn’t our cup of tea. I’m not suggesting freeloading on your parent’s couch 40 hours a week and doing absolutely nothing. But what I am suggesting is holding onto your part-time job until the right full-time position comes along. Besides, if you’re working full-time at a job you hate, there will be less time to schedule job interviews, attend job fairs or comb the Internet in search of companies looking for people with your experience and skills.
Give back and help your parent out
Even if you’re only paying your parents a few hundred dollars a month in rent, that’s money that can assist them during the next couple of years. If they don’t need help with the mortgage or household expenses, these funds can go toward padding their retirement account or perhaps covering some of their home maintenance costs.
If you tell someone about your plans to move back home, they might look at you like you’re crazy or question your decision. However, this decision doesn’t mean you can’t make it on your own, nor does it mean you’re a freeloader. The transition from college world to the real world isn’t an easy one, but with help from your parents you can financially prepare for the road ahead.