When it comes to leaving home, millennials seem to need extra help these days.
Despite falling rates of unemployment and increased median salaries among adults in the 18-to-34 age range, more and more of them are choosing, at least temporarily, to live in their family homes, according to a new analysis of U.S. Census Bureau data released last week by the Pew Research Center.
As of April 2015, the number of millennials living independently — taken by Pew to mean “heading their own households” without having a roommate — was about 67% of the approximately 63 million counted by the Census within this young adult category. That’s even fewer than during the Great Recession.
Take it from someone who just celebrated two months out of the nest myself: “Adulting,” as Kelly Williams Brown calls the process of moving out, is about as awkward and unglamorous as the gerund makes it sound. And to be fair, there’s more than one good argument for why it may be pretty brilliant to live with your family for a year or two out of college.
Yet for millennials looking to leave the nest, here are a few suggestions on how to “adult” well.
1. Play Pretend
Some experts recommend that millennials looking to leave home form good bill-paying habits by paying their way within the family household. And you should pay your parents — by being gracious, being helpful around the house, not sleeping until noon, and perhaps, after a serious conversation about how they’d like you to pitch in, by making a financial household contribution.
But if your parents decide to let you resume your place in the family home rent-free — or if they’re charging you a rent that’s below market rate — be sure to save any earnings that would otherwise be spoken for.
Write down a pretend budget, listing what you might otherwise need to spend on rent, groceries, transportation, etc. Then put that money aside every month as if you were paying the bills. Use that money for two things: to help pay down any student loans or credit card debts (thus boosting your credit score), and to provide a crucial safety net for after you do move out.
2. Jumpstart Your Job Search
You may have a job already, but will it cover your lifestyle shift? Or you may be stuck at home simply because you don’t have a job; earlier Pew Center research found that unemployed millennials were almost half again as likely as employed millennials to be living at home.
If you’re thinking of moving out at any point in the near future, there’s no such thing as starting a job search too early. Job openings may be at a historic high, but employers are getting pickier and pickier about who they hire.
Worst-case scenario, you may end up getting some extra interview practice for a job you don’t want. More likely, you’ll get a sense of what jobs are out there and appeal to you, what positions employers seem willing (or unwilling) to hire you for, and whether there are certain skills you’d like to buff up before you leave home. Maybe taking a coding class would put you ahead in the industry you were hoping to enter; perhaps your design portfolio or your resume could use some work.
Know these things before they get overshadowed by the stress of having to pay rent each month.
3. Set a Deadline
Once you’ve decided that it’s time to get gone, make it official. Set a deadline, give the family your tearful notice, and begin counting down.
Figure out how much you’ll need to put aside for a security deposit, first month’s rent, moving and furniture costs. Start apartment scouting a few months in advance, to understand costs in the neighborhoods you like — and to adjust your expectations if necessary.
If you need to ask your parents for a short-term loan to get you off the ground, be sure to clearly document the agreement and its terms, and resolve to stick to them.
4. Give Your Identity a Reality Check
Planning a budget is important, but sticking to it is more difficult once you’re in the real world. Last night I came home from work only to realize that I was out of laundry detergent, paper towels, and toothpaste. About $30 later, I had all of those things — along with a poorly planned budget that I had overshot.
For at least the first couple of months, while you’re still learning what you can actually afford, rethink your identity. These days, I try to think of myself as a “rent payer,” “grocery buyer,” “home cook,” “lunch packer,” “subway rider,” “phone user,” “health care consumer,” “daily showerer,” and “saver.”
I am not, I try to remind myself, a “shopper” or a “restaurant explorer”; nor am I a “$90-a-month gym subscriber” — at least until I can prove a daily gym habit at my $30-a-month gym and decide whether the extra $60 would cut into my toothpaste fund. My roots look pretty terrible, and I need a pedicure, but I am not a “salon-goer” for now, either — which leaves me even more motivated to figure out a budget I can meet.
5. Keep Asking Your Parents for Help
Millennials aren’t a financially literate bunch; last year, a study by the FINRA Investor Education Foundation found that only about a quarter of Americans in their 20s could pass a five-question financial literacy quiz. Luckily, your parents remain a resource that you can tap into for financial advice long after you’ve moved out; if they’re anything like mine, they’ll even offer plenty that’s unsolicited.
It may be tempting to take your financial independence to an extreme and tell your folks to mind their own business — but hold off. They’ve been handling their own matters of personal finance for years — and there’s much to learn from both their successes and mistakes.