News
How Does LendingTree Get Paid?

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appears on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

4 Money Tips for Adults Looking to Move Out of Their Parents’ Home

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been reviewed, commissioned or otherwise endorsed by any of our network partners.

Living at home as an adult can be a double-edged sword. On the one hand, you can take advantage of the opportunity to save money and focus on achieving your ultimate financial goals. On the other hand, living with your parents could significantly impact your social life.

Amid the COVID-19 pandemic, moving back home has been a common phenomenon. According to a recent LendingTree survey, nearly a third of millennials and Gen Zers ages 18 to 41 moved back home with their parents during the pandemic. And most of them remain at home.

If you’re still at your parents’ home but are looking for a change, here are four tips to help you get your own place.

4 financial tips for adults trying to move out of their parents’ house

No. 1: Focus on reducing debt

The priority for those looking to move out of their parents’ house should be paying down debt. Having fewer recurring debt payments can make it easier for people to afford expenses like rent, says Jacob Channel, LendingTree senior economist.

For the most part, he says, it makes sense to first pay down high-interest debt like credit card debt. That way, you can save more long term and stop your debt from ballooning out of control.

Take stock of your debts — including amounts, interest rates and terms (if applicable) — to see which ones you want to prioritize. Then, come up with a plan of attack.

Tip: If you have a lot of high-interest debt, making bigger payments may not be as efficient. In that case, a debt consolidation loan could be a good option. This could allow you to streamline your monthly payments while getting a lower rate.

No. 2: Boost your savings as much as possible

Focusing on your debt is important if you’re planning to move out of your parents’ home, but so is saving money.

“This can be easier said than done,” Channel says. “Nonetheless, any extra money you save can go a long way to help you cover costs like security deposits.”

Set a saving goal for upcoming expenses. Moving costs, for example, can vary widely depending on where you live, where you’re headed and how much you plan to bring (versus what you’ll buy there). Understanding those costs can help you set a realistic savings goal to make the idea of moving out a reality.

Tip: Depending on your financial institution, you may be able to set up several savings accounts and label them to more easily track how close you are to meeting individual goals. That can feel less overwhelming than setting one big move-out goal.

No. 3: Create a future-focused budget

Online budget calculators can be simple but useful for those looking to move out. Consider your existing financial obligations and what you might need to buy once you move out. This may include renters insurance, furniture, cookware, linens and towels, transportation (if you’re going from borrowing your parents’ car to using public transportation, for example) and health insurance, among other things.

Tip: Our home affordability calculator can help provide insight into what kind of home you could afford to buy if you moved out on your own.

“Even doing something as straightforward as creating a budget in a spreadsheet where you can see how much money you take in and spend each month can go a long way in helping you make realistic financial goals,” Channel says. “The more you know about your current financial situation, the easier it often is for you to make improvements to it.”

No. 4: Talk to your parents about your goal

Living at home can provide an opportunity to boost your savings. But having extra support can help you get to the goal even faster.

Talking to your parents about your move-out goals is the first step. Bring up topics like your desired move-out timeline, how you plan to prepare for the move and what kind of support you’ll need. Of course, not every parent will be able to help financially. But getting everyone on the same page can allow your parents to make adjustments, like temporarily lowering your rent or lending you the family car so you can more easily search for a new place.

If nothing else, talking to them can help smoothen the process so that you’ll be able to focus on enjoying your new digs when you move.

 

Recommended Reading