At What Age Should You Become Financially Independent – 2020 Guide

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Growing up is something that every individual is excited about. This is true regardless of age. Even small kids love when they get the opportunity to pick their own outfit for the day. It makes them feel special. As time goes by, they get more freedom and start making decisions for themselves, and at some point, become totally independent of their parents.

However, there is always a question of financial independence. When should one stop taking money from the guardians? When should they move out and start paying bills on their own? People usually disagree when it comes to answers to these and many other similar questions. As a general rule, some might say that a child should become independent upon turning 18 or 21. On the other hand, nowadays, many college students are still living with their parents or are being supported by them.

If you have reached this point in your life, and are wondering whether the time has come for you to move out and start a new chapter of your life, keep reading this article. We are going to give you some tips on how you can start learning about finances, and also tell you what you can do the reach that goal of being completely self-reliant.

What does this exactly mean?

Source: Club Thrifty

You have two options – you can either move out or stay in your childhood but start contributing to the family budget. Naturally, in order to do this, you need a full-time job that is decently paid, Socialyy has provided an article with useful and necessary steps for financial freedom.

On the other note, if for any reason you do not want to relocate to your own apartment, then some things have to change. First of all, you can start paying rent. Have an open and honest conversation with your parents and decide what amount of money would be appropriate for you to pay. If it is possible, they should put this money away on a savings account, so you could use it when you decide to actually move out.

Secondly, you can make an arrangement when it comes to groceries. This is also something that has to be discussed and something that depends on both your income and the number of family members. But, for example, you can go and buy everything your family once or twice a month.

After a while, you can start paying for your cellphone and Internet bill. These are two expenses that have become a necessity, and there really isn’t point in trying to become independent while your parents are paying for your phone bill, right?

When should you try to do this?

Source: FirstCry Parenting

As already mentioned, this is something that cannot be said with great certainty. Our advice is to start living on your own as soon as possible. If you don’t want to go to college and already have a job, it is time to start thinking about it. When it comes to people who are going to college, some of them choose to support themselves, while others still rely on their parents.

As you can see, this is a decision that everyone makes for themselves, but we are going to tell you why you should do it at your convenience.

It is quite simple, the sooner you learn how hard one has to work in order to afford some basic things, the better. It is very easy to get used to having extra money when you need it and not having to think about the rent and utility bills. This can turn out to be very bad because you won’t master the skills of managing the money, which can be horrible for your future.

However, the decision of moving out is not the one that should be taken lightly. There are numerous things you have to consider and plan, and we are going to discuss only some of them.

What steps you have to take?

Source: Glassdoor

Let’s start with the basics – the first thing you need is a job. Hopefully, you will get an offer as soon as you graduate from college, or at least, shortly after. Clearly, before accepting it, you have to investigate both the offer and the job carefully. Not only do you need something that is paid enough so that you could support yourself, but also, the working conditions must be good.

Once you get a job and start working, you have to assess your income. It is of crucial importance to fully understand how much money you earn and also how much you spend every month. When it comes to income, it includes your regular paycheck as well as some loans you have taken or some extra cash you earn on the side.

Next, you have to think about the amount of money you spend. This is another list that you should gather and you should include everything from groceries and entertainment to approximate amount you can afford to spend on utility bills and rent.

Now, draw a budget. Write down all these incomes and expenses, and calculate the rent you can afford. There is no point in looking at apartments that you cannot afford because you will end up being depressed and thinking less of you. Instead, start the search for something that is within your price range. Almost certainly it won’t be much, especially if you have just started working, but believe us nothing can top that feeling of entering your own place and starting the life on your own.

Upon moving out, you should set another budget that you have to follow strictly. This is the only way to ensure that you won’t run out of money in the middle of the month. In addition, you should also try to save some cash and don’t forget to create an emergency fund. You never know when something unexpected can happen.

Should you accept the help?

Source: Reuters Articles

Finally, this is another question that millennials often ask themselves. Once again, no one has the correct answer. Some parents give the down payment on their kid’s new place, while others can only give extra money when need. Whatever you decide to do, just try not to make the habit of it.

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