Did you move in with your parents during COVID-19? Time to create an exit strategy
Change your mindset, change your living situation.
Bobbi Rebell, CFP®
Personal Finance Expert at Tally
September 14, 2020
A majority of young adults are now living at home with their parents, surpassing the previous peak during the Great Depression.
New findings show 52% of young adults (ages 18-29) resided with one or both of their parents in July, according to a Pew Research study, which is up from 47% in February. What was expected to be a short stint has turned into more than 6 months — and many families have no exit strategy.
“Now is not the time to just wait and see,” says Bobbi Rebell CFP®, personal finance expert at Tally. “The financial strain on parents right now is very real, but often unspoken. Yet simultaneously, the lost year has left many young adults feeling stunted professionally and personally.”
While it can feel overwhelming and discouraging given all the uncertainty, taking charge of your life starts with a mindset shift to focus on achieving your financial independence. We all have our dream jobs and passion pursuits, but the reality is that the pandemic has temporarily stunted many career paths. So if you haven’t been able to find a job in your field in the last six months, it’s time to reset your goals for now.
Next, figure out what financial planning you and your family can realistically do to make it happen. Start with figuring out your needs, and then list out the options: If it is a college student, is living with roommates off campus an option? If post-college, what is keeping them from moving back to where they were? Can you negotiate a lower rent?
Once you know the costs, put together a proactive plan to get there financially. Here are some suggestions on different ways you can tackle different tasks to help you move out and become a financially-independent adult again.
Create multiple income streams
With fewer living expenses, double down on building out your savings. Start by reassessing the skills you have that can make money.
For example, there are many opportunities for online tutoring now. Just make sure all this money goes directly into your move out fund — no late night online shopping sprees!
Be a responsible housemate
If you’re living with your parents as an adult, proactively offer to pay for shared expenses (read: your part of the cell phone bill, the bill for dinner or groceries, buy cleaning supplies and clean the house for them sometimes).
This will help you build trust for getting additional help later, such as being a co-signer on a lease. Also, odds are your parents aren’t telling you this directly, but having another person in the house IS adding to their expenses.
Clean up your credit score
Given the uncertainty, more landlords want tenants with good-to-excellent credit scores. In some cases, they’ll want parents to co-sign and will check their credit history as well. So if high-interest credit card debt is weighing down your score, consider using Tally to help you pay it off faster.
Be patient on your house hunt
Time is on your side. In many regions, more renters are moving out than moving in, so you have the upper hand. You may think one rental is perfect, but if you lose out, there will be another one, just as good if not better.
Agree to a longer lease
Landlords don’t make money if an apartment is empty, so they’re more likely to agree to a lower rent in exchange for a longer lease. Plus, this will allow you to lock in a price that will save you money in the long run.
Finally, set realistic expectations. Just because you set a new goal and have a plan, you probably won’t be able to move out in a week. This will likely take a few months and maybe a year and that’s OK. The most important thing is that you have an exit strategy and know that living with your parents isn’t forever.