Moving Home After College: The Financial and Family Implications

A lot of students go through school without thinking about the financial implications of the process they've embarked on. Most students have never had to take real financial responsibility for their lives before and take out student loans with really considering what it's going to take to repay them. They end up graduating with well into the five figures of student loans and are in a world of financial hurt because of it. When graduation comes around, a lot of students consider moving back home to ease some of the costs of life while paying down debts. This can be a great way to eliminate one's college debt if done right, but there are a few potential pitfalls to that need to be avoided.

Make It Intentionally Temporary. When you start your big job and live at home, come up with a set of goals that you want to meet before you move out. It could be something as simple as paying off one's college debt, and having $10,000 in the bank. Make sure the parents know what your plan is, and how you plan to achieve that goal. This will let you know in advance when it's time to get a place of your own, so that you don't wake up one day, realize that you're 35 years of age, and still living with your parents.

Be Financially Focused. No one really wants to live with their parents, especially after they graduate college! Live on a small fraction of your income (probably around 1/4^th of it if you live at home), and use the rest of the money to achieve the financial goals that you want to achieve so you can move out as quickly as possible. Remember, you're living at home so you can pay off your debt, and for no other reason

Family Rules. Chances are the last time you lived at home you were in high-school raising all sorts of trouble. Your parents probably had a set of rules for you to follow. Of course now that you're a big adult, you have totally different expectations of how your parents will treat you. Their expectations won't always change when yours do, so watch out, otherwise big family fights could break out. Find out what they're going to expect of you before you move in. It's their house, so you have to follow their rules.

Be Willing To Help. Chances are your parents are getting a little bit older and a little bit slower by the time you graduate college. Be willing to help out around the house. You're living there for pretty much nothing, help clean, and maybe prepare a meal every now and then!

Moving back home for a temporary period of time after college can help put you in a better position financially, but if you don't cross all the T's and dot all of the I's, you're asking for trouble.