Many high school graduates looking to go to college see the experience as an opportunity to live away from home and be independent for the first time in their lives. Unfortunately, not many young adults are presented with an opportunity to get real-life financial management practice before being on their own for the first time.
That might not affect you during your collegiate career, but the minute you graduate and step into the real world, it will. You’ll likely be hit with student loans and your first paycheck around the same time, left wondering how to manage your finances effectively now that you’re on your own.
You can prepare yourself, educate yourself, and save money in the process by living at home during your college years. While it might not seem like the “traditional” route, one quarter of full-time undergraduate students choose to reside at home with their parents. Let’s look at some of the benefits of living at home during college and how doing so can help you set yourself up for a more secure financial future.
Saving Money for the Future
One of the biggest benefits of living at home during college is the money you’ll save on room and board. That’s especially true if your parents choose not to charge you rent while you’re living there.
It might be a good idea, however, to set aside some money each month that could be used for rent in the future. Affordable housing for students and recent grads isn’t always easy to find. By saving money each month, you’ll eventually have enough to pay for a few years of rent or for a downpayment on a home by the time you graduate.
You can also save money on everything from food to facilities. Chances are, your parents aren’t going to charge you to wash your clothes nor will they make you contribute to the water bill, electric bill, or any other utilities. Again, however, it’s a good idea to set aside a bit extra each month that could be used to cover those things once you move out.
Doing so will give you a better idea of what you can expect to spend each month when you’re living on your own. When you have that knowledge, you’ll quickly realize what kind of salary you’ll need to make after college or where you could be cutting back so you’re not living paycheck to paycheck.
Build a Budget
Speaking of learning where you should cut back, now is a perfect time to learn how to create an effective budget. Learning how to build a budget now will help you when you live on your own. You’ll likely have more bills and expenses to pay on your own, including things like:
• Mortgage payments or monthly rent;
• Car payments;
• Car insurance;
• Pet fees.
While you might not be paying for all of those things now, knowing how to budget will make it easier to transition to living by yourself later. It’s okay to start small. Consider becoming responsible for your own food budget rather than having your parents buy everything.
You’ll already save on food at home by avoiding an expensive campus meal plan, so determine how much you’re willing to spend on groceries and dining out each month. This will make you more aware of pricing and average costs so you’ll know how to stay within your budget by the time you graduate.
In addition to building your budget, you can also take this time to build credit during college. You don’t have to buy a house to have a strong credit score. Consider purchasing a car, taking on a new credit card, or asking your family if you could be responsible for one of the monthly bills.
Building credit now will make it easier to reach your financial goals after graduation, including homeownership. Plus, you’ll have your parents’ guidance so you can ask frequent questions and make sure you’re establishing credit the right way without going into debt.
Learn, Save, and Grow
Speaking of asking questions, that’s one of the best ways to make the most of living at home during college. Multigenerational living under one roof isn’t always easy, and you’re bound to have your differences. But, your family can teach you a lot about everything from how to save money to investing it in the right places. You’ll also experience benefits like:
• Improved familial bonds;
• Enhanced empathy;
• Better communication skills.
The current collegiate generation is overly confident with money, typically. Unfortunately, wanting financial success and actually achieving it are two different things. By taking advice from older family members, you’ll learn tried and true ways to save money and build a more secure financial future. Money saved is money earned, not money spent. That’s a lesson that can be hard to learn at first, but you’ll be happy once you’ve graduated and have a nice financial cushion to start with.
There are plenty of perks to living at home during college, but finding financial security is one of the biggest. Make the most of your time at home as you go through your collegiate career, and by the time you graduate, you’ll be more confident and secure when it comes to your finances.