Millennial Money Man

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January 18, 2017

Moving Back Home: Temporary Pain for Future Gain

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Moving Back Home: Temporary Pain for Future Gain

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Hey everyone! Today I have a guest post for you from Kelan over at TheSavvyCouple.com. He has a very similar story to mine – it's always cool to see how other people approach living situations after college. Enjoy! ~M$M

So you finished college and you are left at a crossroads. Do you move back home with your parents, or go it alone while you adventure out into the adult world? This is a hard question for MANY millennials finishing college. I personally choose to take the route of moving back home with my parents, and let me tell you it was one of the best decisions I have ever made!

Temporary Sacrifice for Future Gains:

We all know moving back home with your parents is not the most glamorous thing in the world. Reverting back to following their rules and having a chore list to complete was not an easy transition.

The biggest piece of advice I can give you is to remember it is temporary. Most things in life take time and sacrifice to reap the rewards. Be patient. The financial gain you can make while living at home is second to none, trust me!

I was not only able pay off my student loans ($8,000), but save enough money for a down payment on our first house. My expenses were next to none living at home, and I have always been extremely frugal. You can’t beat free room and board! Almost all my income went straight towards my loans to get debt free as quick as possible. Then I focused on stacking the Benjamin’s in the bank. My net worth went from -$8,000 to +$12,000, a $20,000 swing!

Side Hustling Entrepreneur:

Do you remember when your parents told you to “get a job”? I do vividly! I was fourteen, acting like a rebellious, know-it-all teenager. My dad said, “Get a job, get a life”. This hit me like a ton of bricks; it honestly scared the crap out of me. I was thinking I have the rest of my life to work; I’m not working yet.

I started brainstorming about all the possible ways to make enough money to get them off my back. Thankfully my parents pressuring me jump started my e-commerce career. Through high school and college, I ran my own online e-commerce business. I started by selling everything I could get my hands on in our house. Eventually, my parents caught on when they started noticing things missing.

After running out of items to sell, I started learning how to market research. Eventually, I had suppliers all over the world that would drop ship for me. This was way before the Shopify craze.

I was netting on average over $50,000 a year in revenue. My best year topped out at over $65,000.  My profit margins averaged between 10%-15%. Seller fees took away most of my cut, but still not bad for a college kid working part time from home! Check out my interview with the CEO of Doba here.

My other side hustles included: Car washes, yard sales, bailing hay for the local farmer, creating picture slideshows for graduations, selling cell phone boosters at school, and selling advertisement space in our college ran newspaper.

In my opinion, I think EVERYONE should have a side hustle! They are incredible in helping provide financial freedom in your life. My wife and I are avid about having multiple sources of income. We have learned that multiple sources of income lead to true financial freedom and wealth.

College Career:

We made some great decisions in choosing our college career path. Community college was such a good option for both of us. My wife, Brittany, was able to attend for free with financial aid. I was able to walk away debt free as well with my parents help and my side hustles.

The summer after finishing our first two years of college, I proposed! We were engaged at 20 years old and happily in love. Not a big surprise by most of our friends and family because we started dating back in ninth grade =).

We both graduated from the same state college after four years with our bachelor’s degrees. Deciding it was the best choice for both of us we moved back home with our parents. It was not a big deal since our parent's houses was a five-minute walk from each other. You could say the stars aligned for us. Finding each other at such a young age and lasting through college had to be divine intervention.

The last few weeks of school I went to my school's job fair and within two days I got three different job offers. It was pretty exciting! With my personality, I took the job that was the most exciting and had highest income potential. A freaking insurance sales job, what was I thinking?! My time there lasted all of about three weeks before I had enough cold calling to last me the rest of my life.

Family Support:

Heading into the “real world” after graduating was the biggest transition of my life. I’m sure those who have finished college can relate. It is very difficult to go from living the college life of partying and having little responsibilities to a full-fledged adult. The struggle was real!

Moving back in with my parents gave me the support I needed to figure out what I wanted to do with my life.

I was able to explore and jump around to three different jobs that year (Insurance sales, UPS, and a Jail Deputy). The last job I got as a Jail Deputy was more of a career than a job. It came with great pay, benefits, and a pension. I was extremely proud of receiving the job as it had such a vigorous hiring process. Over 2,000 applicants take the exam each year and around 20 get the offer.

I wasn’t stuck at a job I hated like a lot of millennials that choose to live on their own out of college. I had the freedom to figure out what was right job for me. It was such a blessing my parents allowed me to move back home with them and adjust to “adult life”.

Buying Our First House:

Living with our parents was the huge boost we needed to become financially free and jump start our life together. We were very frugal with our money and saved as aggressive as possible. Together we saved up enough money for a down payment on our first house. We made the seller pay the “concessions” to help make it more affordable.

A quick side note about buying a house, which can be a controversial topic. In our opinion, we would much rather own an asset that we can build equity with. Our house according to Zillow has already appreciated ~$15,000 in the first few years of owning it. On the opposite side of things, renting can really slow down your financial freedom.

For example, let's say your rent is $800 a month. After paying your $800 a month for three years, what do you have to show for it? NOTHING, you have no asset and no equity built up. You only have the $28,800 hole in your pocket. Obviously, everyone’s situation is different and renting might be a great option for some.

My point is, do your research! If moving back home with your parents enables you to become debt free and save, do it.

My Takeaway:

Don't forget that moving back home is temporary. Stop caring what others think! Everyone moves at their own pace. If your parents are willing to support you for a few more months after college then take advantage. The longer you can stick it out at home the better. Demolish your debt and stack your savings.

Start living frugal so you can start living free.

Question for you:

What do you think about moving back in with parents? Could you do it?

Live differently. Your bank accounts will thank me later. ~M$M

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Comments

  1. Funny you should mention community college. I, too, went to a community college. I got myself a job out of high school and decided I wanted more options. I saw a route to options as a college education. Even though, I had a really nice 2-bedroom apartment and was living a pretty cool life with my full-time job and plenty of friends, I decided I couldn’t afford to pay rent and tuition. I bit the bullet and moved back home. My “back home” was a trailer. The very thing I had tried to escape my entire life – I went back to it for my future self. Boy, this sounds like it’s very own blog post. 🙂 So my answer is YES, grads should consider moving in with parents after school. It’s the only time in life you’re super flexible with minimal obligations. Kudos to you and your wife!

    Mrs. Mad Money Monster

    Reply

    • Mrs. Mad Money Monster,

      Totally agree going back to your “Old Self” can be a hard decision. “It’s the only time in life you’re super flexible with minimal obligations”. – Could not have said it better.

      Reply

  2. great story ! I moved back home initially as well, since I hadn’t yet met my wife, I ended up buying a house with a college buddy – we then rented out the extra bedroom, and even the basement for a short stretch. It was a super frugal way to own my first home – which is now an income producing rental property! Keep up the good work.

    Reply

  3. Bobby,

    Can’t thank you enough for sharing my story with your readers. I think the decision to move back home after college can be a very difficult. Love that I am able to share my story and hopefully help people make the right choice.

    We have been very blessed by the support and decisions we have made in life. We continue to live Frugal & Free as we strive to build wealth and help others do the same.

    ^Sounds like both of you were very savvy as well!

    Thanks again!
    The Savvy Couple

    Reply

  4. I’m up in Lake Tahoe right now and I was soaking in the outdoor hot tub when the older couple came in and started talking to another couple about how all three of their children, ages 20 to 24 are living at home with them now. They like it, and they feel good they are providing for their adult kids.

    Perhaps going back to living at home with your parents after becoming an adult is more common now days? When I graduated from college in 1999, all I wanted to do was try to prove to them that I could make it on my own. As a result, I lived in a studio with my friend for two years to save money.

    But, if they had a nice apartment in New York City or a home close by where my job was, I would be tempted to stay at home to save money. But I think back then there was a stigma against going back home after college.

    Now that my parents are older, I wouldn’t mind going back home to take care of them.

    Sam

    Reply

    • I do think it’s becoming more common, although I don’t have any stats to back that up at the moment. I would imagine that it will be more of the norm moving forward since college prices don’t seem to be drastically dropping any time soon.

      Reply

    • Sam,

      Thanks for sharing. We also think it is becoming very common. Actually, most of our friends still live with their parents, they must be BANKING……hopfully. Temporary sacrifice for financial freedom.

      Reply

  5. Moving back home after college was such a normal thing, especially for folks like me who graduated during the Great Recession. It was pretty good. If I had been better with money back then, I probably could’ve saved and had something to show for it. Ah well.

    I did end up having to move out of my parent’s house when I went to law school because I did the math and found out that living at home and going to school in my home city was more expensive than me moving out to the midwest and living on my own with a 50% scholarship. If law school had been cheaper back home, I definitely would’ve lived at home and saved money that way.

    Reply

  6. Woah, with a job like Jail Deputy you must have seen some real $hit.

    I don’t think there’s any shame whatsoever with moving in with your folks after graduation. My dad offered to let me stay at home indefinitely after graduation to build my savings and figure out my next move. It didn’t work out for me because a) The cost of living in his city was higher, b) I wanted to marry my boyfriend in my current city, which was 5 hours away, and c) I was a stubborn old goat.

    I would have saved a lot of money if I had lived with my dad, but ultimately it just wasn’t the right choice for me. But it’s right for a lot of people! Let the numbers talk to figure out what’s right for you.

    Reply

    • Thanks for sharing! Yea like I said in our post the stars aligned for us at a young age. The fact we were able to make it through high school and college together is such a blessing. Then our parents living within a mile of each other! Had some amazing support through our transition into adulthood.

      Reply

  7. Thanks for sharing this story! I recently moved back in with my parents, and I have had trouble coming to terms with it. I was living on my own but saw the financial savings of moving in with my parents and not paying rent in downtown. I am less worried about what others think. I find most are supportive of the situation. I am concerned not taking advantage of the situation. Mostly eating their food, overstaying my welcome, and stopping them from having an empty nest. How would/did you handle this situation Kelan?

    Reply

    • Kraken!

      Congrats on moving back in….weird right!? You made a hard decision but I think down the road you will really be happy with it. Like my post said just remember it’s temporary and takes advantage of that.

      The first thing you should do is destroy your debt. Become debt free and have a clean slate, try to do this before moving back out. The start saving as much as you can to save for an emergency fund 3-6 months of your monthly expenses. You are going to have to be frugal in how you live to make the most of this situation.

      For me, I never really felt awkward about overstaying my welcome or eating too much food. I have a younger brother so he was living there when I moved back in which helped a ton.

      I would say with any relationship be open and honest. Have a talk with your parents about food and offer to chip in a monthly budget to help offset that cost to them. Set a goal when you want to move out and also share that with them. They will have plenty of time for an “open nest”. If they let you back home they want to continue to help you out until you are fully ready and prepared to do on your own.

      TAKE ADVANTAGE! Have a budget and stick to it. Destroy your debt and save! Start living frugal and free like us! Check out our blog if you have not yet.

      Reply

  8. This is well written. I enjoyed the article. We did that 2 times. The first was when we moved back to our home state and we paid off debt. Then when we bought a house our lease ran up before the house was ready. It really is a great way to help out paying off debt.

    Reply

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