In the coming weeks, a lot of new college graduates will no doubt be packing up their dorm rooms or college town rentals and saying goodbye to their campuses for good. Getting a degree is a big milestone, and one you should be proud of. But now that you're graduating, you might have a conundrum — where should you live?
Your first inclination may be to go out and rent an apartment, whether alone or with friends. But seeing as how the median monthly rent in March was $1,937 on a national scale, according to Rent.com, you may be better off going a completely different route — moving back home.
When it pays to return to the nest
After living on your own for a number of years, the idea of moving back in with your parents can seem unappealing. But if you go this route, it could really benefit you financially.
For one thing, many people graduate college with debt. Moving back home for a period of time could make it much easier to start chipping away at your loan balance.
Also, it's important to have an emergency fund to cover at least three months' worth of essential bills — and ideally, before you take on expenses like rent. If you're just graduating from college and don't yet have much cash in your savings account, moving back home for a year or so could make it possible to build up some reserves.
What's more, these days, a lot of people are having a hard time buying a home. Mortgage rates are up, as are property values, and that combination has made homeownership unaffordable for a lot of people.
Now, if you're first graduating from college, purchasing a home may not be that high on your list of priorities. But you may want to buy a home within the next few years. And if you live with your parents for a bit of time after college, it'll give you an opportunity to save up a down payment to put toward a home purchase.
A move worth making
Between inflation and high rent prices, living on your own right out of college can be a tough thing. Remember, chances are, you're going to be looking at entry-level jobs that come with entry-level salaries. And if you'd rather not have to spend a large chunk of your earnings on rent, then returning to your parents' home could allow you to shed existing debt, boost your savings, and set yourself up to meet different goals.
Of course, you'll want and need to set some expectations if you'll be moving back home post-college. Talk to your parents about boundaries and make sure you'll be able to respect each other's privacy.
Also, don't take too much advantage of their generosity. If your parents are paying their mortgage loan already, they may not feel compelled to ask you to pay rent. But if you'll be using electricity and eating food out of their fridge, the nice thing to do is at least offer to chip in for those things.
By virtue of not having to pay rent for a place of your own, you're apt to save a lot of money. And that could be a very good way to kick off young adulthood.
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