Living and Saving as a Millennial Living with Your Parents
The
generation of the internet age is one of the largest and most diverse in the U.S. Although
Millennials have been defined by a relationship to technology, the generation has
been steadily redefining adulthood. Millennials have adapted and endured in a post-recession
economy, their social and global values have inspired change in the labor market,
and now one-third of Millennials are living in a parent’s home.
For
the first time in the Modern Era, this is the most common living
arrangement
for 18 to 34-year-olds. This new normal has not come without its challenges.
Many are saddled with student loans, consumer debt, and a serious lack of
savings – both emergency and retirement. The silver lining? Living at home
provides some much desired financial breathing room, just when it’s needed
most.
If
you’re a Millennial about to move back in with your folks, who has been living
at home for a while, or is looking for a launching pad to independence, here
are a few tips to help you make the most of your time at home:
Keep track of
what goes in and what goes out regularly and realistically. You’ll be able to
identify spending habits worth adjusting so you can grow your savings where you
need it most.
2.
Get a handle on your student
loans and other high-interest debt.
Not unlike a
mortgage, you’re in for the long haul when it comes to student debt. Talk to
your lender about your repayment options and adjustments, and make sure you can
afford what you’re paying each month. If you have credit card debt, work on
paying this debt off pretty quickly, so you will have more money to put towards
your other goals.
3.
Set pragmatic goals, and
plan for them.
How can you best
leverage your time at home? Save for a security deposit for your solo space and
build an emergency fund to handle life events as they happen. Make compound
interest work for you by getting ahead in retirement savings. Need that extra
motivation? Make a commitment to yourself to save by taking the America Saves pledge.
4.
Ramp up repayment.
Get ahead of interest on your consumer debt (and/or
student loans) by breaking up your payments biweekly or adding one additional
payment per year.
5.
Check in on the health of
your credit.
A recent report found that young adults are
less likely to have accessed their free credit score than older generations. Knowing
more about how credit scores work and having a healthy credit score can put you in a better spot
to reach your goals and save you a bundle along the way. Not sure where to start?
Try the Credit Score Quiz to boost your credit
score knowledge.
Tammy G. Bruzon works for America Saves, managed by the nonprofit Consumer Federation of America (CFA), which seeks to motivate, encourage, and support low- to moderate-income households to save money, reduce debt, and build wealth. Learn more at AmericaSaves.org.
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