The unemployment rate for millennials has dropped from 12.4 to 7.7 from 2010 to 2015. Yet despite this increase in landing jobs, young adults between the ages of 18 and 34 are living at home with their parents more now than they were in 2010, with an increase of 24% to 26%, according to the Pew Research Center analysis of the U.S. Census Bureau.
In high-cost areas like New York, the percentage of millennials living at home is even higher, at an astounding 30%.
So why is it that employment rates and living at home are simultaneously increasing?
According to Luke Delorme, a Research Fellow at the American Institute for Economic Research, “Young people have more debt (student debt has increased an extravagant 167% between 2006 and 2015), a higher cost of living and stagnant relative wages.” Mix these all together with loving parents and it’s a recipe for staying comfy and cozy back at home.
However, the fact is, everyone --millennials included-- has to move out of their parents’ homes at some point. It builds character, responsibility and helps to develop independent adults.
In order to guide millennials in to the real world, we have gathered some pointers on how to move out of your parents’ house.
Start paying bills now
There’s no better time to start paying bills than when you’re still in the comfort of your own home (just in case you need a cushion). Paying bills is hard, and debt is one of the main reasons why millennials who do move out boomerang back home after a couple of years. By learning how to budget yourself (use this monthly rent calculator) by paying your parents rent (or at least your own car insurance and cell phone bills) and contributing to household needs, you won’t be as surprised by the impact of bill-paying once you get in to the real world.
Job hunt now
One reason you may be living at home might be that either you don’t have job or you don’t have one conducive to comfortably moving out. Use your time at home to beef up your resume, update your portfolio or take some courses or certifications that may aid in the field you’re looking to get in to. Regardless, sitting around with no job opportunities in sight and a lack of motivation to acquire one won’t get you out any time soon. Make it happen by making it happen.
Pay off debt nowIf you have student or credit card debt accumulating over time, now’s the time to buckle down and get it paid off or paid down. Even if you are contributing to your parents, it’s likely you aren’t paying as much as you would if you were on your own. Use any extra funds that aren’t going to your savings account to pay off your debt. Having a clean slate and healthy credit will be an important step toward your future financial health.
Cut expenses you don't need
There’s a fine line between needs and wants. It's cruical that you cut some expenses that you don’t necessarily need. Bring home-brewed coffee to work rather than that daily trip to Starbucks, cook your own meals, do your own manicures and budget regular and holiday spending with your future in mind.
Set a deadline now
Deadlines make goals easier to attain. Set a deadline (it may be months, or even a year depending on the circumstances) on when you want to move out. Research apartment prices in areas you’re interested in moving to, calculate security and pet deposits, utilities, cable, etc. and budget yourself accordingly. Create a savings account primarily for the purpose of moving out, where you will add a percentage of your paycheck to each month. By having attainable and achievable goals that you commit to, your move will be a reality.
Moving on your own is scary. It was scary for your parents too. Talk to them about it. They’ve made financial mistakes as well and are very likely to want to help you get on your feet and teach you everything that they’ve learned over time. By setting yourself up responsibly now, your future will be that much brighter.