These days, I hear a lot about how millenials and younger people are having trouble with the rising costs of living. I don’t doubt that things are hard, but there’s always things you can do to make it a little easier on yourself.
Effects of North American Culture
Generally speaking over here in North America the longer you stay at your parents’ house before moving out the more of a ‘loser’ you are. It’s interesting how different this can be around the world. I know plenty of cultures where it’s expected that children will stay at home until they’re full on married. And hell, even then they might just all live in together in a bigger house so that everyone is sure to be taken of. I can’t say that I find that the most enticing prospect but there’s always a happy medium. This ‘loser’ culture over here is forcing kids out of their homes way before they can properly support themselves. Sure, you could live with 3 other people in a tiny apartment and live off of ramen and cheese sticks but that’s no proper kind of life.
The Simple Trick
It’s so simple that even I did it. You simply stay at home longer and build up a proper base of money, make sure you’ve got a solid job, and then move out when you’re really established. I, for one, stayed at home until I was 24 and just had a ridiculous amount of money when I moved out. I was making 40k/year at my first job, paying minimal rent to my parents and I simply could not spend the money enough to make a dent in it. I can’t remember exactly but I’m sure I was saving close to $2000/month starting at age 19. Obviously not everyone is going to be making 40k at 19 years old but this is the best time to make the most of your savings. Remember, the magic of compounding interest means that investing $10,000 at 20 years old and getting a modest 7% annual return gives you $150,000 at age 60. Waiting just 10 years to invest that $10,000 will cut your return in half to only $76,000 at age 60.
Doing This Intelligently
Now remember, it’s no good to do all this if you don’t actually save and invest that money. Getting this done in your early 20’s can make saving for retirement a breeze (relatively speaking). I didn’t do this and all that money that I saved is now stuck in a rather stupid investment which I’ll cover at a later time. Stick that money in uncomplicated index funds and you’ll be well on your way to doing things right. I can’t even imagine how much further ahead I would be right now if I had known then what I know now!
Yep, people might find it strange that you’re still living at home when you’re 23/24, but you’ll have the last laugh later on when 2 extra years at home gave you an extra $100,000 in retirement.
Have you moved out yet? Do you think that you moved out too early?