When Can I Move Out of My Parents’ House? Steps Toward Financial Independence as a Young Adult

Becoming financially independent as a young adult is part of growing up. There will be a point where you’ll be responsible (ugh, right?) for all sorts of things. Though we’d rather categorize them under “adulting” and hope someone else will take care of them for us, this might include:

  • Needing new tires for your car
  • A month where the utilities bill is higher than usual
  • Starting to pay student loans
  • Saving up for a new car
  • Paying insurance (and lots of it)

When you’re moving away from home, life gets more expensive. Obviously, since you’ll be the one footing all of the bills now. Living on your own, you’ll be responsible for buying the really boring stuff like paper towels and hand soap. And groceries can get expensive. Fair warning.

Being financially independent means you've got a plan for your money, including the first big decisions you'll make about moving out on your own: What will it cost to live by yourself — or with roommates? Are you starting a full-time job soon? What role will student loans play in your monthly budget? Who do you owe money to? How much will you save up for __(fill in the blank)__?

Related: How I Paid Off Over $12,800 in Loan Debt in One Year (Both Car + Student Loans!)

Related: Find Out Where Your Money Is Going

When Can I Move Out of My Parents’ House? Steps Toward Financial Independence as a Young Adult // Ask Allea

Here are some big things to consider (though it's certainly not an all-inclusive list), plus a handful of practical tips to run with:

Recognize the privilege.

Recognize that it’s a privilege to live at home with your parents. Or that they’re helping you out with anything: cell phone, car insurance, or perhaps they purchased your car for you in high school. 

Not everyone has parents helping them out, so please don’t take this for granted.

Maybe even thank your parents…

I said it.

Understand your new expenses.

Okay, this seems weird, but at some point you’re going to have to ask your parents what expenses they’re expecting you to cover, now that you’re “on your own.” If you’re truly going to be financially independent, that means you’ll probably want to start paying for these things:

  • Car insurance
  • Car registration and plates
  • Gas for your vehicle
  • Vehicle maintenance
  • Cell phone and data plan

When I was right out of college, I would write my parents a check for my car insurance, since I was still on their account. I got my own car insurance when I bought a new vehicle, which was when I turned 26. Up until then, my parents got a check from me twice a year to cover my car insurance. (You can set up automatic bill pay, if you don’t want to remember to write them a check when it’s due.)

The reality is, your parents can kick you off of their phone plan at any moment. It’s better to at least be aware of the expenses your parents are covering, be willing to cover some (if not all) when you get your first full-time job. It’s part of growing up — you know, paying bills.

(destiny’s child, anyone?!)

Get a job.

You need to be earning income for yourself. Negotiate a salary that’ll be worth the work you put in but isn’t so low you’re eating Ramen for dinner three nights a week. I mean, unless you like Ramen that much :)

And if you can’t find a full-time, salaried job yet, but you really want to be out on your own — get a part-time or full-time position that’s hourly. Start working for that hard-earned cash, yo.

Pay yourself rent.

While you’re living with your parents and you have a job, “pay yourself” what you might be paying in rent when you move out. Whether that’s $300, $500 or $800, get in the habit of this money not being available. You can “pay yourself” by putting that money toward:

Savings

Build an emergency fund (seriously, only use it for emergencies) of $1000 - $2000, for starters. You don’t have to have this amount saved away before moving out, but aim to build up your savings right away, so you can sleep at night knowing you have a cushion to lean on.

Credit Card Debt

It will SUCK to be out on your own with credit card debt. Tackle your credit card debt as much as you can.

Beat the interest-accruing/credit-score-ruining side of having a credit card. You can have a credit card and pay it off every month and all will be swell — but if you can’t get that under control, then cut that baby up. You don’t want that kind of taunting and interest-accruing/credit-score-ruining stuff in your life. Ain’t nobody got time for that.

Your Parents

If you owe your parents money, make a plan for paying them back.

Money will not magically “appear” in your checking or savings accounts. Or at least it shouldn’t, since you’re trying to be financially independent and all. Fly the coop. Get a job. Pay yourself and pay your debt. Live within your means. You’ve got this.

Psych! Student loans.

Whether you’re at your parents’ house or just moved out on your own, spend your six-month grace period socking away what will be your student loan payment. Put this in savings, along with your “rent” or start paying down your debt right away — it’s up to you!

Keeping “rent” or “student loans” out of your budget from the get-go will help you see what you can realistically spend on other things, once you’re out on your own, like groceries, eating out, entertainment, clothes, the works. It’ll force you into living within your new “means,” since you’ll have new expenses coming at ya soon.

Save up for a rental deposit.

You’ll need to save up for your first month’s rent and your rental deposit (often the same amount as your monthly rent). You’ll need to pay both up-front when you move into a new place. Sucks, but true.

Respect the home or apartment where you’re living. Treat it well, and you should be able to use your rental deposit as your last month’s rent — and if not, your landlord should return it to you after you've moved out, if nothing in the rental space is damaged.

Find some roommates.

Be careful not to shoot too high on the kind of lifestyle you can afford after graduating college or moving out of mom and dad’s house. Ease your way into getting an apartment by yourself. Apartments can be expensive for one person to afford — and on an entry-level salary at that!

Related: Cheap Rent in Your 20’s: Holding On For All It's Worth

I’ve heard that once you live on your own, it’s hard to go back to living with roommates. Capitalize on your flexibility to live with other people at this age and start saving now.

Before you jump at the chance to live in a New York City apartment by yourself, pull a Monica Geller and get yourself some roommates. If Rachel Green isn’t too cool for roommates, neither are you. It saves you tons of money (like, actually hundreds of dollars) and it teaches you to live in community with people. Honestly, I think it’s part of growing up into a well-rounded, problem-solving and confrontation-handling adult.

Once you get your money figured out, know the costs of living alone and are willing to write that rent check, go for it! I won’t stop you :)

As for me, I’m 27 and still rocking the roommate situation. And guess what? I pay super cheap rent. My roommates are awesome, I’m in a great neighborhood and I don’t write anyone a check for over $400 each month. I’m clearly bias about the roommate thing — and the Nebraska thing, because I am allllll about this low cost of living.

Roommates are great for splitting the cost of things like Amazon Prime, Netflix or Hulu accounts — you’re all in one house, so why not? Consider splitting costs of groceries too, like milk, spices or baking supplies*.

Even if you’re an introvert, still consider saving money by living with roommates. Know your boundaries and when to leave the gaggle of extroverts to themselves if you’ve had too much interaction for one day.

Practical Tips for Gaining Financial Independence as Young Adult:

  • Get your own bank accounts, if you don’t have them already.
  • Understand your credit card.
    • Have you been rolling over your balance from month to month? What would it take to eliminate this debt in the next few months? Six months? Year? Make a plan and knock that debt out.
  • Figure out your student loan situation.
    • Know who your loan servicer is, how much your payments will be and when they expect your first payment. Some servicers reduce your interest rates if you set up automatic bill pay through their site — look into it!
  • Determine what your future budget might look like.
  • Know where all of your important items are.
    • Maybe get a lockbox to keep your social security card, passport, checkbook, spare car keys and backup external hard drives. (I lost my passport once. Never again.)
    • Keep your health insurance card in your wallet, with a copy of it in your lockbox.
    • Make a copy (or write it down old-fashion-style) of the front and back of your credit cards, keeping this information in a lockbox. If they ever get stolen or lost, you'll have your credit card company's contact information, as well as your card numbers.

 

What do you think? Are you ready to move out of your parents' house?

What am I missing on this list? Is there anything else you can think of?

 

Related: How I Paid Off Over $12,800 in Loan Debt in One Year (Both Car + Student Loans!)

Related: Find the Balance: Pay Down Your Debt & Still Have a Life

Related: Find Out Where Your Money Is Going

*Roommates are great because you can dance with them in the kitchen while making cookies and rocking out to Amy Grant’s 1983 Christmas album

I never said I was cool, guys.