According to a recent study posted in The Wall Street Journal by PEW Research Center, “the percentage of 18- to 34-year-olds living with their parents is higher today than it has been in decades. Currently, 26% are back in the nest, up from 22% in 2007.”
Whether it is simply the hardships of the economy or the anxiety of moving out on your own, millennials are very apprehensive when it comes to this matter.
“Can I afford it?” “What would my rent be?” “Is it smart to get a roommate for now?” “How much should I save for cushion room?” “Am I really ready for this?”
All of these questions and more have crossed the mind of an eager independent that wants to leave the nest. The answers to those questions all depend on the individual and their financial standings, but here are some things you should consider “having down pat” before you decide to branch off from your safe space.
A Stable Income:
Moving out on your own requires major independence. Have you been working at your current job to a point where you feel stable? Do you have a steady income? The stress of moving out on your own will be minimized knowing you have a solid flow of cash coming in.
If you are in between jobs, or in the interview process, strongly consider waiting for a definite offer and position before looking into apartments. You don’t want to sign a year lease for an apartment,- and then realize after the fact that you won’t be able to afford it. You must also give yourself reality checks, when it comes to your new style of living. The 65 inch TV looks great in any room when you don’t have to pay for it. Realizing your new financial standards is a must when moving out on your own.
In the end, if you want to be financially responsible, you need to budget your annual income towards your living situation and have a steady income to be grounded.
Having an “Emergency Cushion”
Having emergency money is something people often forget about when they are eagerly trying to move out of mommy and daddy’s house. They know they are “old enough”, and want to be on their own. Realistically, if you are seeking little to no financial help from your parents after leaving the nest, you’ll want to have some backup cash saved for a rainy day.
So how much should you have saved for backup? An AmeriChoice Financial Services Representative advises that one should have at least 6 months worth of income saved before moving out.
This can be used for medical emergencies and those unexpected plot twists that life will throw at you from time to time.
Being Educated on Living Expenses:
Water, electricity, gas, cable, and phone services are just a handful of expenses you may not immediately think of when contemplating the big move. If you’re not accustomed to paying your own way and don’t educate yourself adequately on the costs of living alone, you may find yourself biting off more than you can chew.
You also need to consider security deposits, grocery shopping and personal expenses, such as student loans, auto loans, or any credit card debt you may have racked up during college.
If you are still unsure, take the quiz for a more in depth look into your personal goals, savings and financial lifestyle.
Last year, a study by the FINRA Investor Education Foundation found that only about a quarter of Americans in their 20s could pass a five-question financial literacy quiz. So keep asking questions! Your financial institution is there to help make smart money choices and guide you with financial advice when you need it most.
Contact an FSR today!
