The Financial Implications Of Living With Mom And Dad

Recently, “Joel” wrote in with the following question about living with his parents after college:

Currently I’m a 22 years old and fresh out of college with a bachelors degree in Computer Science. I have secured a job which puts in me in a great financial situation – I will be bringing home $50,000 a year. This is more than double what I used to make as an intern, and now I’m trying to figure out how to make the best possible use of the increased income. Unfortunately I have roughly $40,000 in student loans which I will have to start paying on in October.

My question for you deals with my current living situation. I have moved back in with my parents, and I’m fairly happy. But how long should I be “mooching” off of them? Only for a couple of months until I find my own place? Or should I consider staying with them for a while longer assuming my parents don’t mind? It might be helpful to know that my parents live in a rural area which is 45 minutes from my job. I could find an apartment in the city where my job is for around $600 a month, but reduce my drive to 15 minutes or so.

Any help or insight on this situation would be greatly appreciated, as would any general advice to recent grads like myself.

Joel’s situation is fairly typical among recent college graduates, and it’s a situation that is fraught with a lot of issues, both financial and emotional. Here’s my advice for figuring out the best path through a situation like this for all parties involved.

Figure out what you want Are you ready to be on your own with all the opportunities that it affords? Or would you prefer to get a big head start on your student loans while in a safer environment? The answer there has a lot to do with your personality and personal needs than anything else.

Know the true costs You will be spending $600 a month on rent. You’ll also be responsible for your own food preparation and other bills. On the other hand, you’ll also be shaving a half an hour and at least a gallon of gas off of the commute each way. Have a firm grasp on what the real costs are and what the move would do to your budget, and also know how quickly you could pay off your loans if you weren’t faced with those costs.

Observe and respect your parents’ needs Are they enjoying an empty nest? Or are they really happy to have you there? By “mooching” off your parents, you are affecting their lifestyle as they move towards retirement – don’t make yourself an additional burden on people who have given you so much already.

Have a serious discussion about the situation Everyone involved is an adult, so have an adult conversation about it. Everyone involved should lay all of their cards on the table and talk sincerely about their expectations – no holding back. It may be that your parents actually expect you to or want you to move out sooner rather than later, or it may be that they actually want you at home for as long as possible. Perhaps they expect you to help significantly with the household chores and food preparation, or maybe they’d like to see a small amount of rent paid.

Plan to get out eventually If you do decide to stay, define a timeframe for when you do plan to spread your wings and fly on your own, even if it is multiple years in the future. An indefinite situation is never a healthy one, and having a target date in mind makes it much easier to plan for that date.

Have regular serious discussions about the situation if you decide to stay It may seem like a great idea at first, but after six months, the situation may be souring and it could be time to move on. On occasion, touch base with your parents and make sure that the situation is still working for all involved.

If it works for both parents and children, this type of situation can be very useful for a young professional just getting started. The biggest pitfall to avoid, though, is a situation where one member is harboring hard feelings that can fester and ruin a perfectly healthy relationship, one that is far more valuable than any dollar amount.