There are a number of factors to take into consideration before making the decision to become financially independent from parents. Understanding if you are financially ready and identifying what options you have based on your income and expenses are two of them. Moving out is a major milestone that requires proper planning and management. Here we provide tips on how you could approach it.
Financial emancipation is one of the most important decisions one can make. It marks the beginning of a new stage of life in which you alone are in charge of your day-to-day life, using your own means. This financial independence from parents entails certain obligations and responsibilities that you need to bear in mind. One of those is managing your finances.
On average, young people in the United States leave the parental home at the age of 24. In Spain and Poland the average is 29, while in Portugal it is 33, according to data provided by Eurostat. What is certain, mo matter how old you are, it that it’s advisable to prepare your finances before taking that step that represents a transition from childhood to adulthood. To discuss the most important aspects to bear in mind, we're going to look at the example of Ana.
This is the most frequently asked question, but the answer depends on a number of variables. The thing that will impact your personal finances most will be whether you are planning to rent or whether you want to own your own home.
For Ana, moving out was one of her goals, so she decided to save a portion of her salary to achieve that goal. However, although she had decided to do this, she doesn't know much it could cost to rent or buy, or how much money she will need to maintain a house. Ana looked for information on how to gain financial independence. She found four factors that helped her work out the cost of living alone without disregarding her financial health:
As we've seen, living alone brings about a number of financial obligations that you have to prepare yourself for. Nonetheless, there are alternative options that will help you achieve your goals while easing the financial burden.
If you can't afford to live on your own, you can share a place with other people. It will save on expenses like rent and bills related to the household, as these are shared among the people living there. This can also be a good way to gradually learn how to manage your finances and prepare to go for it alone.
One way to make your day-to-day life easier, while also saving money on transport, is to choose an area within a short a journey as possible from your workplace or place of study, or the places you go to most often. Walking or cycling where possible is a good way to fit physical activity into your day while also greatly reducing greenhouse gas emissions (thereby helping to protect the environment).
When the time comes to replace a device, you can go for a second hand one. You'll find a wide range of options, many in good condition and at a reduced price. You can also pick up food for free or at a reduced price from restaurants, cafes or supermarkets when they have gone unsold (thereby also reducing food waste).
You can save even more money by cooking at home more, buying unpackaged and unprepared ingredients and chopping and peeling them yourself, or fixing things around the house yourself.
Ultimately, moving into your own place will enable you to develop the skills to be able to make your own decisions. In the world of finances, moving out of your parents’ home is synonymous with better understanding the value of money and learning to make budgets and how manage your money. Leaving the family home in a planned way will help you reach your goals and maintain good financial health in the present - and in the future.