One of the most important financial moves you can make when you’re relatively young is build up an emergency fund. That gives you cash reserves to tap when an unplanned expense pops up. And it could also be your ticket to avoiding costly credit card debt when unanticipated bills arrive.
But let’s face it — when you’re young and first embarking on a career, it can be really difficult to carve out money to put into your savings account. After all, you have rent to cover, utilities to pay, and other expenses to manage that come with living on your own.
But what if you were to not live on your own for a period of time? You might think that the idea of moving back in with your parents isn’t so appealing. But if you go that route, you won’t be going it alone.
Recent data from Empower shows that 22% of Generation Z is living with their parents in order to save money. And if you’ve been struggling to build savings, it’s a move you should strongly consider as well.
The upside of moving back home
Many people are able to live at home as young adults without having to pay rent. Now in that situation, the nice thing to do is chip in for things like utilities, streaming services, and groceries, especially if you have a tendency to take long showers, watch your fair share of Netflix, and raid the fridge. But you might save yourself a bunch of money by virtue of not having to pay rent alone.
RentCafe reports that the average rent across the U.S. is $1,702 a month. Now if you’re sharing a small apartment in a moderately priced city with two roommates, your monthly rent might only be around a third of that.
But let’s say you’re currently spending $600 a month on rent and you move back home for a year. That could easily make it so you’re able to bank $7,200 in 12 months’ time. Plus, if your parents are doing well financially, they may not even take your money for things like electricity and streaming services. So you might manage to save even more, thanks to their generosity.
A short-term sacrifice worth making
You might feel that moving back in with your parents is a major setback on the road to becoming an independent, functional adult. But rather than look at the negative, think about the financial upside.
Will you be giving up some amount of privacy and even freedom by moving back home as a young adult? Possibly. But think about the financial freedom you’ll gain by having a nicely padded savings account.
Of course, if you’re going to move back home, it’s important to set ground rules. Those might include things like you texting your parents as a courtesy if you’ll be out until 2 a.m., keeping quiet late at night, and doing your share of the cleaning.
All told, you might prefer to live outside of your parents’ home now that you’re grown and capable of hacking it on your own. But moving back home for even a single year could do a lot of great things for your savings. So if your parents are open to the idea, then it pays to take them up on that option and return to the nest temporarily.
