I’m graduating in a year and it looks like I’ll be moving back in with my parents for the first few years of my working life. It’s not that I’m broke, I’ve already saved up nearly $50,000 through working and investing and have no student debt as university is pretty cheap in Canada, but it seems logical as a similar standard of living would cost me at least $15,000/year in rent. It seems to me that that money would be better used for saving up for the down payment on my own home in the future.
However, what are some drawbacks of moving back in with my parents? Do most people think it’s weird if I have the means to live by myself? Will it be noticeably harder to find/maintain a girlfriend with such an arrangement? And should I pay my parents anything for living with them (taxes and fees are about $1,000/month)?
It’s really embarassing, but pretty common these days. Living in your parents basement shouts failure (doesn’t matter if you’re somewhere upstairs either). But that’s just a meme. It’s a good way to save money if you can stand your parents and they can stand you.
However, if you are working and have 50 grand in the bank then how is that difficult to spend 15K a year in rent?
If you don’t value independence or having your parents closely involved in almost every aspect of your life then save yourself the money. At least have a little pride and pay them some rent though.
How so? Is it rude if I do or if I don’t? I’m sincerely not sure if most people contribute to the monthly costs if they move back in with their parents. And if I should pay a portion, how much is “normal”? One-third? Half? I’ve also once heard that parents don’t expect anything as they want to subsidize their children’s savings…
You are an adult. You have the means necessary to support yourself. Why should your parents pay for you to have a roof over your head? I can’t believe you’re asking this.
Go for it, if you all get along. You will attract only girls who are as serious as you are about saving. But yes, you should contribute a fair share in the costs.
<18 years of age: no embarrassment, as it should be.
18-22: Either you’re in college and have no money, or are just starting out in a trade and have no money. Mildly embarrassing since you don’t get the freedom of the dorm/college apartment, although it probably should not be.
23+: Get a job and get your own place. You’ve done the first part, but moving back in with your parents seems short-sighted and selfish. Your parents raised you, I bet they weren’t planning on having you come back and squat during their golden years. Plus, good luck socializing or finding a significant other - “Hey baby, wanna come by to my mom’s place?” If you aren’t even paying rent, well, name-calling is not allowed outside the Pit but I’m sure you understand how I feel.
In short, it should be very embarrassing. Moving back in with your parents once you’ve graduated should be reserved as a last resort, the kind that comes after the divorce where the bitch took everything AND you lost your job AND your car caught fire and insurance didn’t cover it AND you were the victim of identity theft and haven’t got your bank savings back yet.
Pay here isn’t very high but taxes and property prices are. A typical net salary for a new graduate would be about $30k-$40k per year, so $15k would be up to half of that. A typical single family home in a decent neighborhood here also costs at least $700k. So if I have rent my own place, I’ll basically have no ability to save money. With a typical 30% deposit to get a good mortgage rate, I’ll need to save at least $200k, which will take me to at least age 40 if I don’t have that $30k head start.
Personally it would take the threat of starvation to move back home. And while I probably wouldn’t date someone still living at home, I definitely wouldn’t date a man who can afford it and is living at home AND is not contributing to the household income.
Your parents may have been looking forward to you gone!
First of all, I think you want to make sure you aren’t short-selling yourself on a salary. While $30k probably is starting salary for a lot of college graduates, I wouldn’t be too surprised if $45k or even $55 was closer to the college average.
Then, the idea that you need to pay $700k for a house. Unless you want to live in Manhattan or the Bay Area, I think you need to readjust what you think a single family house is and what a decent neighborhood is. I doubt the $300k houses are next to meth labs, wherever you live.
Next, you really only need a 20% deposit to avoid PMI.
I started out with much lower savings than you have, but I’m pretty sure my wife would not have been interested in dating me if I lived with my parents, and we found a way to afford a house no problem. You can still save money while renting, you just have to control your expenses.
In my situation, my parents are happy and expect me to move back as it’s a pretty big place for only 2 people. In fact, they even want me to travel over 600 miles every month from university to visit. I can see that everyone says that I should support myself if I have a job, but isn’t that extremely short-sighted? How do you expect the young generation ever to buy their own homes if they can’t save more than $1-2k per year? Even worse is that property prices here are at record highs while wages haven’t moved. I’m even a bit lucky as we only have to pay $8-16k/year for university in Canada and most people don’t have much debt as a result.
Among my stay-with-parents friends, there is a trend I’ve been noticing:
Everyone involved are adults now, but the parents continue to try and treat it as a parent-child relationship, causing friction. (or the adult child is simply irresponsible in general)
The parents and adult child nitpick, argue, and spend their time together otherwise being angry at each other.
The adult child as a consequence whines about it all the time but continues to stay at home because they supposedly don’t have enough money yet to move out.
My advice is: move out and do your own thing.
You are very lucky if you both get free lodging/food/everything from your parents AND they don’t start nitpicking you over your laziness right away. Nobody likes to hear a whiner who is only paying a paltry amount a month to their parents, either. Even moreso if they know you have ample means to move out.
You can pass off your situation as you being super-responsible with your money, but it never really works. My one friend is still just like he was in college, living at home with his parents, blowing too much money on booze instead of saving for moving out like he promised, whining about how they treat him and how he doesn’t have a girl, still stuck in the same immature mental rut as when he graduated because he doesn’t have to make any hard decisions. It’s no wonder a girl doesn’t want him.
I moved out with a paltry $3000 in the bank (the apartment cost $1400) because I “have more spine than any of your brothers ever did” as my dad says. It was totally worth it.
Yeah, it’s embarrassing, it’s lame, it speaks volumes about your character, and it’ll stick you in a rut.
Don’t expect to jump into a house right away, and doing so is foolish. You should be renting and working your way up the pay grade ladder. 5 years later when you’ve settled in, you can start the real house saving.
If you’ve got 50K saved up you already have enough for a downpayment. Maybe not on a 700K home, but there are things called “starter homes.” The game is to build up your equity. You also have enough $$ to rent an apartment. The old rule was not to spend more than 1/4 your monthly income on housing but I think the new rule is 1/3 and anyway those are more guidelines.
If you live with your parents you need to bring some sort of value to the deal other than just your sparkling presence, of course. Do chores, shovel the walks, mow the laws, etc. AND pay rent, just so you get into the habit of it and learn how to budget.
Some parents are more amenable to this than others.
There is a certain progression into adulthood and having your own place is one of the steps.
I guess if your only goal in life is to buy a house that’s worth in the neighborhood of one million dollars, your plan of living with your parents for the next ten years and stiffing them on the expenses sounds like the way to go.
Your original questions boil down to whether that’d be weird and make the other aspects of your life harder. The answer to that is yes.