Moving out of your parent’s home is a rite of passage, and these days, people live in their parents’ homes for longer. In 1960 roughly 20% of people aged 18 to 34 were still living at home with their parents. By 2014 that number had risen to 32.1%, and it is likely to be even higher today.
When should I move out of my parent’s house?
You should wait until you can support yourself financially before moving out of your parent’s house. To become financially independent, you may have to make sacrifices in other areas of your life, but the upside of this is that if you plan to buy your own home, the sooner, the better.
Of course, this doesn’t take into account the emotional aspects of moving out. You may be desperate to leave asap or to stay home as long as possible. Then there are your parents. They might want you to stay with them, or be desperate for you to go.
To know whether it is time to move out of your parents home, you have to consider a complex range of financial, social, and emotional factors. If you are wondering if you are ready, ask yourself why you want your own place.
Why Do I Want To Move Out Of My Parents Home?
Are you considering moving out just because of a vague feeling that you should? If you and your parents are happy with the situation, sit back and stay. You can use the time to save money and stock up on household basics. This way, when the time does come around, you’ll be in an excellent position to do so.
On the other hand, perhaps you are struggling with the lack of privacy that comes with living at home as an adult. Or maybe still being at home is cramping your style. In this case, if you or your parents want to make the break, then it’s time to start planning.
How Do I Move Out Of My Parents House?
When you plan to leave home, the first and foremost consideration is making sure you can support yourself financially. Once you make the break, you’ll most likely want to stay living independently, so it is essential to have your finances in order.
Assess Your Situation
Begin by looking at your current financial situation. Record what you earn every month before tax. If this amount varies, write down how much you have earned each month for the last year or two and then divide it by the number of months you are facing. This will give you an average income.
Next, write down all of your current debts and monthly payments.
Now you need to make a calculation. Divide your monthly debt payment by your monthly income. The number you get will be a decimal. Multiply that number by 100, put a percentage sign next to it, and the result is what is known as your debt-to-income ratio.
If your debt-to-income ratio is higher than 40%, you will find it very difficult to make a mortgage or rent payment every month and still have enough money to live on. If this is the case, pay down as much of your debt as quickly as possible.
Ideally, you should have a debt-to-income ratio of 35% or lower before taking on the commitment of a mortgage or rent.
Meanwhile, you can start planning.
Work Out Your Independent Living Budget
When you move out of your parent’s house, you will become responsible for a slew of expenses. To know how much you will be paying out each month, you’ll need to know the average costs, in the area you intend to live, of the following:
- Rent or mortgage payment for the size of the home you plan to buy.
- Utilities – Gas, electricity, hydro, phone, internet.
- Homeowners or renters insurance.
- Homeowners Association fees, if applicable.
Take all of the figures that apply to either renting or buying, and work out how much these basics will cost you each month.
Then look back through your last couple of years of bank and credit card statements to see how much roughly you spent each month on things like:
- Eating out & other forms of entertainment
- Personal care – Haircuts, cosmetics, basics like shower gel, etc.
- Transportation – Car insurance, gas, repairs, cabs, Uber, bus fares, cycle costs, etc.
- Other groceries
- Anything else
And don’t forget to consider how much you would spend on top of that if you had to pay for everything while living at home. For example, it can be easy to work out how much you spend on eating out but forget about the cost of food you eat at home – but do not buy yourself.
Oh, and don’t forget things like laundry that can quickly add up to a significant expense.
Now you have two figures, your monthly housing costs, and your monthly living costs.
Ideally, you should add a 10% buffer to these amounts and then have at least six months’ worth of living expenses saved before moving out of your parent’s home.
Evaluate Your Situation
Now you know how much it will cost for you to live independently and how much income you have. Take a look and decide, honestly, whether or not you can afford to live the lifestyle you do right now, and pay for all of your other costs.
If you can, then that’s great; you are ready to start planning your move. If not, you need to look at where you can either save money or make more income.
Paying Out Less
You can save money either by cutting back your living expenses, for example, going out less or lowering your potential housing costs, for example, living in a smaller home or a more affordable location?
When you are doing this, don’t forget to consider the knock-on effects of changes. If you go out to eat less often, you will still need to eat. Therefore you cannot just knock your eating out expenses off your list; you also have to add in extra money for groceries.
Likewise, if you choose to live in a location where the rent is more affordable, will you have to spend more on transport to get to work?
Taking In More
You can also look at whether there is a way for you to earn more income. For example, can you get an additional part-time job, do more hours in your current job, or devote some time every week to a paying gig, like Uber?
If you are planning to do any of these, ensure two things:
- You will be able to rely on the additional income every month.
- You take into account the costs of earning additional income.
Ask Yourself The Hard Questions
Now you know what you have to do to move out of your parent’s house, ask yourself, Is it worth it? If you and your parents are happy enough with the current arrangement and you will have to eliminate your social life and work 24/7 to afford to move out, do you really want to?
Calculate Your “Start-Up” Costs
Starting out in your first home can be expensive.
If you are renting, you’ll need to have your first and last month’s rent, plus a security deposit. You may also have to pay a deposit to the utility companies.
If you are buying a home, you’ll need enough money set aside for your deposit and all of the fees you will incur at your closing meeting.
Then, no matter if you are buying or renting, you’ll need some basics like bedding, pots and pans, dishes, cutlery, something to sit on, and something to sleep on. You can get many of these items second hand or from friends and family, so they do not have to cost a fortune, but you will need some money for household goods.
If you are 25 and you still have a curfew, have to eat dinner with your parents every night, or have to sneak people in and out of the back door when your olds aren’t looking, it may be time to move out of your parent’s house.
However, doing so is a significant financial commitment, and if you and your parents are happy with the arrangement, you could be better off staying put and saving money until you feel the need to fly the nest.
If the time has come, plan very carefully. Pay down as much of your debt as possible and save every dollar you can in preparation. This may mean some lifestyle changes, but when you can come and go whenever you like, without having to explain where you’ve been, or with whom, it will be worth it.