What’s the smartest thing you can do after college graduation? My answer may surprise you: move back home. Now before you write me off for being completely out of touch with reality, hear me out. Yes, the point of going to college (aside from getting an education) is to launch into adulthood and learn to be independent. No, I don’t think moving home is taking a step backwards. In fact, I think living with your parents could be one of the most financially savvy and adult things you could do. Here’s why.
Temper Your Lifestyle Inflation
One of the best — and worst — characteristics of our generation is that we have whatever we want at our fingertips all the time. That can lead to efficiency, convenience and debt. It’s harder than ever to wait for anything we want when we’re used to everything being available in milliseconds and obtainable with or without a cash flow.
Many recent grads end up buried in credit card debt or falling behind on their student loans because their income can’t match their expenses. Going down that road can wind up costing you a lot in the long run, as you are vulnerable to late payments and fees. If you’re not careful, your credit score can suffer and you can start off your adult financial life on the wrong foot.
Moving back home allows you to hit the pause button and get serious about what makes sense for your life right now. While it’d be great to graduate from college, move into your own apartment, and start building a life, it may not make sense to do all this at once. But if your family will allow you to stay for awhile, you can save hundreds — if not thousands — of dollars in rent each month. If you’re looking for your first job, that’s a huge weight off of your shoulders. Instead of worrying about how you’re going to feed yourself and keep the lights on you can focus on the job search. Which is more important to you — living in a great apartment of your own or landing the job that gets your foot in the door to your career?
Save Some Serious Cash
Rent, utilities and food are budget parasites. While most financial experts tell you not to spend more than 25% of your income on rent, there are some cities in the U.S. where that’s just not realistic. If you live in one of the more expensive cities in the U.S., you may barely have a few dollars left after making these payments. Then there’s the move-in deposit to consider, as well as the need to purchase furniture, cleaning supplies, and everything else it takes to make a home.
Now imagine staying at home until you either get your first job or have been working long enough to save up enough to pay for all of this in cash. That’s a much smoother transition than just signing a lease and figuring it out as you go! I’m not suggesting that you take advantage of your family. Even if you don’t have your first professional job you should still work so you can save as much as possible. You should also pay for your own food or contribute to the household food budget and offer to help keep the house clean while you’re living there. Then save, save, and save some more! Whether you’re waiting tables, working as an intern, or pulling in a salary at an office job, not having the obligation of rent and utilities gives you a once in a lifetime opportunity to put money aside. Because let’s face it, when you finally do move out, you’re never going to want to move back in with your family again. This is one of the rare times in your adult life that it’s societally acceptable to live with your family, so use the opportunity to set yourself up with a solid financial base.
Open the Door for Bigger Opportunities
The final financial advantage to living at home after graduation is that it can open the door for bigger opportunities down the road. What are your long-term dreams in life besides working in the career of your choice? Have you ever thought about traveling around the world, permanently relocating to another city, or buying a house? Well, if you live at home after graduation and save the majority of your income, you can not only save up enough to move out and have an emergency fund, but you can even save for these bigger dreams!
It’s worth repeating that living at home after graduation is a once in a lifetime opportunity that you’ll only truly appreciate once you’re losing much of your income to rent or a mortgage. Seize the opportunity to give yourself a solid financial future and plan for achieving dreams you may never have thought you’d accomplish. It’s all about priorities at the end of the day — living in your own place now or accomplishing your bigger dreams later. A little bit of sacrifice now can impact your life in a great way for years to come.
After reading this you might still think I’m out of touch with reality — or that I think everyone loves living under their parents’ thumb. One thing I should have mentioned is that I’ve learned this all from experience. I lived with my parents during and after college and it was hard. Even though my parents didn’t mind as long as I contributed to the household, I was embarrassed to not have a place of my own. It bothered me every day. But it was worth it. Thanks to living at home I saved up enough to move to New York City and then years later move again to San Francisco. It’s led me to my job today which has led me to the opportunity to write this article right now. A few years of sacrifice in my early twenties is still serving me well just a few months shy of my 30th birthday and will do the same for years to come.
This story is an Op/Ed contribution to Credit.com and does not represent the views of the company or its affiliates.