Making the Most of Moving Back in With Parents

In many countries around the world, it’s normal for kids to live at home until they get married and have their own families. But in the US, children are encouraged to leave the nest sooner rather than later.
 
Now, that seems to be changing, as high inflation and rising home prices are pricing many young adults out of their own place and back home. According to the Pew Research Center, as of 2023, about 57% of adults between 18 and 24 are living at home, while only 53% were living at home in 1993.
 
That trend may be around for a while, especially if the housing market remains unattainable and promises of student loan forgiveness continue to stay out of reach.
 
If you’ve just moved back home, you should use this time to set yourself up financially. Read below to learn how to handle living at home – both to keep your sanity and keep your bank account in check.

Financial benefits of living with your parents

The main upside to living with your folks is that you can save money on rent and put it toward your other financial goals or responsibilities, like paying down student loans, building an emergency fund or even saving a down payment on a home.
 
If you’re still looking for a job, living at home can help you stay financially stable while you find the right one. Or if you’re trying to start your own business or work as a freelancer, living at home can help you get your business off the ground.
 
In short, living at home can help you make better decisions because you won’t have to be consumed with the financial problems of day-to-day life.
 
If you are paying off debt, prioritize credit card debt first. Credit card debt typically has higher interest rates than other types of loans. Once you knock out credit card debt, you should start contributing to a retirement account.
 
Ideally, you should save enough in a 401(k), 403(b) or other employer-sponsored plan to get the company match, if there is one. If you don’t have access to an employer retirement plan, you can open an Individual Retirement Account (IRA) and invest in that.
 
Also, start saving for your emergency fund, which should be held in a savings account. The emergency fund can be used to cover expenses when you lose your job, have a medical emergency or have any other kind of costly catastrophe.
 
You can also start saving a “move-out” fund, which can pay for your apartment’s security deposit, moving expenses, new furniture and more. That way, you won’t have to dip into your emergency fund when you finally decide to move out on your own.

How to live with parents

When you’re living at home as an adult, it can be easy to revert back to your teenage self. Maybe you assume that your parents will handle all of the chores and household tasks just like they did while you were in high school.
 
But they probably expect you to do your fair share – which means taking on more of an equal role. And even if they don’t ask you to do more chores, it may be good for your relationship if you do more around the house. Acting like an adult may not guarantee that they treat you like an adult, but acting like a kid certainly won’t help.
 
Before you move back home, you should talk about what their expectations are as far as house rules. Are you allowed to have overnight guests? If not, how late can your guests be over? Are you expected to cook, mow the lawn or walk the dog?
 
And here’s the big question: do you have to pay your parents rent? Some parents charge their kids rent just so they don’t get too comfortable at home and get used to making some kind of payment. Other parents will not charge rent and hope that their child saves the money instead.

Save in a separate account

While you’re living at home, set up a separate savings account and funnel the money you would normally spend on rent. That way, when you’re ready to move out, you’ll have a nice healthy nest egg to use for moving expenses and emergencies.​

Stay focused on your financial goals

When you’re living at home, it can be easy to take your financial situation for granted. You might find yourself spending money on video games, concerts, and clothes just because you can afford it. And before you know it, you’re itching to move out, but you don’t have enough money.
 
Unless you plan on living at home for years, you should try to still live on a budget while you’re at home. That means figuring out how much you want to save up before you move out.
 
Also, before you move out, you should practice living on your new budget. That means pretending that you’re paying your own rent, utilities, and groceries. Take the amount that you would have to pay and transfer it to a different bank account.
 
Then, see if you can live on the rest. Doing this will help you realize if you can actually afford to live on your new salary or if you need to stay at home a little while longer. It might also spur you to get a better-paying job or to look for roommates when you move out.
 
Having a clear, specific goal in mind can help you avoid overspending, like an exact amount you want to save. For example, if you want to save up $5,000 before you leave, you’ll know exactly how much you’ll have to stash each month. That will keep you motivated to be frugal instead of living luxuriously.
 

 
This article was created in accordance with the Patelco editorial policy.