Should you move out of your parent’s house?
Easy there, tiger.
It’s not as simple as kissing your mom and hitting the road!
There are all sorts of things you’d be wise to consider.
Here’s what you need to take into account when deciding when’s a good time to move out.
What’s the ideal age to move out?
Although the average American moves out at 25, there is no “ideal age”. This is because the most important factors to consider when making the decision to move out, vary so much from person to person.
Your financial situation, relationship status, location, and the opinion of your parents can all affect whether or not moving out makes sense for you.
How old is too old to live with your parents?
Whilst there might not be an “ideal age”, we can all agree that there is certainly a limit. In most cases, there is a point at which living with your parents becomes pathetic.
What age is this exactly?
A survey from TD Ameritrade found that living with your parents becomes “embarrassing” at age 28.
Of course, this is just an average. There are a few circumstances where the smart move is to stay with your parents until well into your 30s.
These situations are the exception though, not the rule. Unless you’re going through some extreme difficulty or your parents need you around for some urgent medical reason, 28 seems to be the upper bound of when living with your parents makes sense.
What do your parents think?
Whilst your parents are legally responsible for you up to the age of 18, If you are beyond that age then it wouldn’t be unreasonable for them to want their own space.
Most parents don’t just boot you out of the door on your 18th birthday. But it’s important to consider that if you’re in your 20s, your decision to stay at home is as much about them as it is about you.
If you are thinking about sticking around for a few years, talk to them. Make sure that they don’t feel burdened by your decision.
Financial factors to consider before moving out
Whether you’re renting or buying, moving out is going to be expensive.
This isn’t just about how much it costs vs how much you make. You need to think about student debts, the housing market, and who you’re going to live with.
The last thing you want is to move out, and then have to move back in when you run out of money.
Moving out is getting more expensive every year
You need to understand the state of the housing market in 2022.
The average house price in America has tripled since 1997, from $175,400 to $525,000.
The average rent has more than doubled.
9.1% inflation in 2022 means that people’s dollars are being stretched further and further.
Moving out, whether you are renting or buying, has become significantly more expensive over the last 30 years.
Whilst your parents could perhaps make the decision to move out more casually, for our generation moving out is an extremely serious financial situation.
The following questions will help you to determine whether you have the means to get your own place.
Are you a college graduate?
If you graduate college, you’ll start your working life in $32,731 of debt on average.
The monthly payments required for these loans will be $2-300. These payments cannot be missed — defaulting on a federal loan will cause you a whole world of pain.
If you’re in a position like this and you want to move out, getting yourself to a point of financial stability is an absolute must.
Do you have financial stability?
Being able to live independently, with the economy in the state that it’s in, requires more than just money. You need to be sure that whatever life throws at you, you’ll be able to take care of business.
There are 3 components to financial stability.
If you make an extremely high income, but you never build up any savings, you are no more financially secure than somebody living paycheck to paycheck on minimum wage.
To properly meet your obligations as a tenant or a homeowner, you’d be stupid not to have some kind of money put away.
How much? 3 months’ worth of living expenses is a great place to start. With 3 months’ expenses stashed away, losing your job will be less of a financial disaster and more of a temporary annoyance.
- Stable income
Are you paid off of sales commissions? Are you a full-time contracted employee, or do you work for yourself?
All of these things affect your financial stability.
If you are a young entrepreneur trying to get a business off the ground, then it makes a lot of sense to live at home for longer. Most businesses don’t make money initially, and this could cause you a problem if you’ve got to cough up rent every month.
Of course, volatile income doesn’t stop you from having the ability to move out. If your income is unpredictable, you might want to save more like 6 months’ expenses so that you can keep yourself out of trouble.
- Live below your means, even if only a little
It’s not enough just to have savings. If you are going to live independently, you should really be adding to your savings with every month that passes.
It’s widely recommended that you save 20% of your income, but this can be tough when you first start out. The important thing is that no matter what happens, your bank balance goes up every month rather than down.
Even if you’ve only got 3 months’ expenses in the bank, and you save 100$ dollars every month that passes, you can make decent progress.
You’ll be getting stronger over time, rather than weaker.
What is essential is that there’s always something at the end of the month that you can put away.
Are you looking to rent or buy?
Here’s another important thing to consider when thinking about moving out.
Do you see yourself buying a house? If so, when?
Even as a first-time buyer, you’ll likely need at least $40,000 for a downpayment on your first home.
You’ll likely need far more- There’s stamp duty and legal fees, and you’ll still need money set aside for emergencies.
For these reasons, if you are looking to buy a house then living with your parents whilst you push your savings might be the smartest thing you can do.
Of course, getting on the rental ladder is far more straightforward. Just make sure you consider when you might want to buy a house — Paying rent makes it harder to save, and you likely won’t want to rent forever.
Are you living alone, or with other people?
Sharing an apartment or house with other people is a powerful solution to the rising cost of living. You could split an apartment with friends, move in with your partner, or find random housemates using sites like spareroom.com
Most likely, the market in the state that it’s in, moving in with others in some way is going to be your best bet. You can spend significantly less money on rent and bills, and you’ll also get the social benefits that come with communal living.
You’ll learn a lot about living with roommates through personal experience — I don’t think I need to blog about it. A little drama with your roommates is all part of the fun!
What you do need to make sure, is that the contract has reasonable terms.
How large is the deposit that you must pay before you move in? If you don’t end up getting along with your roommates, would moving out be straightforward enough? These are questions that are well worth answering before you sign on the dotted line.
No one can tell you when you should move out.
I certainly wouldn’t — It’s not my place.
If you’ve thought through all of the points in this article, then you are in a position to make a properly informed decision.
If you end up living with your parents a little longer, make use of the advantages you have. Save your money. Pursue your more high-risk ambitions.
If you’re getting your own place, here’s something you should know.