The Path to Independence

Top Seven Moves for Young Adults Living with Their Parents

In today’s world, nearly one-third of young adults between the ages of 18 and 34 are still living with a parent. This phenomenon, once rare, has become increasingly common due to a variety of factors. Economic struggles, the challenges of finding affordable housing, and the burden of student loan debt are just a few of the hurdles that make it difficult for young adults to leave the nest. However, achieving independence is a crucial step in personal development, and it is possible with the right strategies. Here are the top seven moves young adults can make to move out of their parents’ home and gain the independence they seek.

1. Create a Realistic Budget

One of the most important steps toward independence is financial literacy. Creating a realistic budget is the foundation of this. A budget helps you understand where your money is going, how much you can save, and what you can afford when you move out. Start by tracking your income and expenses for a month to get a clear picture of your financial situation. Include all sources of income, such as your salary, freelance work, or any side gigs. Then, categorize your expenses into essentials (rent, utilities, groceries) and non-essentials (entertainment, dining out). Aim to save at least 20% of your income if possible, setting aside a portion specifically for moving expenses and an emergency fund. Financial stability is key to successfully living independently.

2. Pay Down Debt Strategically

Debt, particularly student loan debt, is one of the biggest obstacles for young adults trying to move out. Paying down debt should be a priority because it not only improves your financial situation but also boosts your credit score, which is essential when renting an apartment or applying for a mortgage. Start by listing all your debts, including interest rates and minimum payments. Focus on paying off high-interest debts first, such as credit card balances, while maintaining minimum payments on lower-interest debts. You can also consider consolidating your student loans or refinancing to lower your monthly payments. Reducing your debt burden makes it easier to manage your finances when you’re on your own.

3. Build a Solid Savings Plan

Saving money is crucial for achieving independence. In addition to your emergency fund, which should cover at least three to six months of living expenses, you’ll need to save for moving costs, security deposits, and initial furnishing for your new place. To build a solid savings plan, automate your savings by setting up a direct deposit into a high-yield savings account. Determine how much you need to save monthly to reach your goal within your desired timeline and stick to it. Cut back on non-essential expenses and find ways to increase your income, such as taking on a part-time job or selling unused items. Having a financial cushion will give you the confidence to make the move.

4. Research Affordable Housing Options

Finding affordable housing is one of the biggest challenges for young adults. Before you move out, research the housing market in your desired area. Consider whether renting or buying is more feasible for you and explore different neighborhoods to find the best fit for your budget. Look for rentals that offer good value for money, such as those with utilities included or that are close to public transportation. If rent in your area is too high, consider alternative living arrangements, such as co-living spaces, renting a room in a shared house, or living further from city centers where rents are typically lower. The key is to find a place that is within your budget and meets your needs.

5. Develop a Sustainable Income Stream

To live independently, you need a sustainable and reliable income. If your current job doesn’t pay enough to cover your living expenses, consider looking for higher-paying opportunities or negotiating a raise. You can also explore additional income streams, such as freelance work, part-time jobs, or starting a side business. The gig economy offers various opportunities, from ride-sharing to freelance writing, which can provide the extra income needed to support your move. Ensure that your income is stable enough to cover your living expenses, savings, and debt payments before taking the plunge into independent living.

6. Enhance Your Credit Score

Your credit score plays a significant role in your ability to rent an apartment or secure a mortgage. Landlords and lenders often check your credit to assess your reliability in making payments. If your credit score is low, take steps to improve your score before moving out. This includes paying bills on time, keeping credit card balances low, and avoiding taking on new debt. If you don’t have much credit history, consider applying for a secured credit card to build credit. A good credit score can also help you qualify for better interest rates and lower security deposits, making it easier to afford your new living situation.

7. Set Clear Goals and Timelines

Finally, setting clear goals and timelines is essential for making the move out of your parents’ home. Decide on a realistic timeline for when you want to move out and set specific goals to achieve by that date. This could include saving a certain amount of money, paying off a specific debt, or securing a new job. Break down your goals into smaller, manageable steps, and track your progress regularly. Having a clear plan and timeline will keep you motivated and focused on your goal of independence.

Conclusion

Moving out of your parents’ home and gaining independence is a significant milestone, but it requires careful planning and preparation. By creating a realistic budget, paying down debt, building savings, researching housing options, developing a sustainable income stream, enhancing your credit score, and setting clear goals, you can successfully transition to independent living. Remember, the journey to independence is not just about leaving home—it’s about building a stable and fulfilling life on your own terms.

If you are looking for some help on managing your personal finances or would like to learn more about financial products and services available from Town & Country FCU, reach out to one of our member service representative by emailing us at info@tcfcu.com, calling 800-649-3495 or book a consultation here.