New Grads: 4 Reasons to Not Leave the Nest

If you’re a recent college grad, you might be considering moving back in with your parents. Though it can be a difficult transition for some, here are four reasons why it might be a good idea.

Key Takeaways

• If you have student loan debt and/or haven’t found a job, living with your parents could be a good financial choice. 
• Living in your parents’ home may also give you a more predictable lifestyle.
• While it’s a great solution for many people, it doesn’t make economic or practical sense for everyone.

1. Lower Cost of Living

The cost of making it on your own can be pretty high. If you’ve landed your first post-college job, things like rent, groceries, and utilities can end up taking a huge bite out of your paycheck. And if you’re still looking for that first job, it can be very easy to rack up debt.

Living at home is a great way to cut back on expenses. That doesn’t necessarily mean those expenses will go away entirely, but it does mean that you’ll likely be paying a lot less than you would for your own place.

It’s actually a good idea to pay your parents at least a modest amount of money each month (if you’re able) so you don’t become complacent about your living situation. Living at home isn’t a permanent solution, and this should get you used to setting aside money to pay your rent in a timely manner.

2. Location and Auto Insurance

Where your parents live could end up saving you not only a good bit of money but time as well. A long commute can really take a toll on your finances. If your parents are located in an area closer to your job, you might end up saving on gas.

Your parents’ address could also end up saving you money on your auto insurance. Insurance companies charge lower premiums to those who live in safer areas and usually offer discount, multi-car rates when you put your car on your parents’ policy.

3. Emotional Support

Think that living on your own is the key to a glamorous lifestyle? Think again. Chances are, your parents’ digs are nicer than what you can initially afford. You could also save a ton on expenses like cable TV, internet, or a Netflix subscription. Not to mention that much of the furniture you take for granted at home will have to be purchased or borrowed for your first attempt at ruling your own roost.

But it goes beyond money. While hitting up your local McDonald’s for dinner after work might be convenient, it just doesn’t stack up to a home-cooked meal. And you may not be able to afford those daily jaunts to the coffee shop once you’re on your own.

In addition, making the transition from school to a set 40-hour workweek can be a tough one students often are not prepared for. If you are one of those students who booked all of your classes for 11 a.m. or later and stayed up until midnight finishing assignments, this change of pace can really wreak havoc on your emotions. Living at home can make it that much easier to handle because you will have a personal support system waiting for you after your long day at work.

A roommate can also provide a support system, but finding a good roommate can be a tough endeavor. You may come home from a horrible day at work to discover that it’s “Hawaiian Party Wednesday” and a whole fraternity has invaded your home.

4. Using Time to Your Advantage

If you’re still on the job hunt, living with your parents could be the key to eliminating a heap of debt. Not only does living at home save on your living expenses, but it also gives you the luxury to stick it out that much longer until the right job comes your way.

This may also be a good time to pursue internships, which are often unpaid. Once you gain training and experience that will help you land a good job, it will be easier to test your wings and leave the nest.

And if you already have a job, there’s no better time to save and pay down student debt than when you’re living with your parents. Taking out some of that principal on your student loans now can save you a ton of money in the long run.

While you’re at home, you can also save for things like a down payment for your future home or your first month’s rent and deposit. It can even afford you the ability to save extra for retirement when you’re young and can really use compound interest to your advantage.

When You Should Find Your Own Space

While living at home is a great solution for many people, it doesn’t make sense for everyone. If your parents live in Oklahoma and you’ve got a great, high-paying job offer in New York, living with the folks could end up being a bad idea. Any situation where you’d be making more than you’re saving makes a good case for living on your own.

Other reasons why you may not want to live with your parents include:

• Inability to develop your sense of independence
• Financial burden placed upon parents (particularly those close to retirement)
• Difficulty bringing home friends, dates, or significant others
• Dealing with curfews or other rules you feel you have outgrown
• Emotional stress level may outweigh financial gain

Furthermore, without the pressures of paying rent and living expenses, many young people might not be responsible enough to save for the future.

Important

Living with your parents should be a temporary way to help you get a more sound financial footing, not a way to live a more luxurious lifestyle with your increased disposable income.

How Many Young Adults in the U.S. Live with Their Parents?

The U.S. Census Bureau found that 1 in 3 adults in the U.S. between the ages of 18 and 34 live in their parents’ home.

How Many Young Adults in Europe Live with Their Parents?

Eurostat analyzed how many adults between the ages of 18 and 34 live with their parents in 29 European countries. The results vary widely, from a low of 16% (Denmark) to a high of 77% (Croatia). Other countries where it’s very common include Greece (73%), Portugal (72%), Serbia (71%) and Italy (71%).

How Do Americans Feel About Young Adults Living with Their Parents?

About half (47%) of Americans surveyed by the Pew Research Center say it doesn’t make a difference, whereas about a third (36%) say that it’s bad for society, and 16% say it’s good for society.

The Bottom Line

If you’re facing loads of student loan debt or haven’t yet found a job, living with your parents could be a really good financial choice. Living on your own might be nice, but financial freedom might just be better. Give this some serious thought. Take your time. It’s a big decision.