This is a guest post from my online friend Ben from Blue Dollar Bull. He knows what he’s talking about when it comes to family legacy and using your family to leverage impact, career and finances. If you’re going to reach FI, why not help your entire family as well? We also interviewed him over on the podcast, and now here’s a very snazzy post from him!
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Would you keep living with your parents if it meant saving a ton of money? 🤔
In a few societies, it has become commonplace that we move out of ‘home’ as soon as is financially possible. Even if it means renting in a bad area, staying with more people than we care for and sleeping on a couch. But what if there was a better way that seems to be lost to the passage of time? A way that was diluted by a culture rife with suggestive content that really doesn’t have your best interest in mind?
In a lot, maybe most, other cultures that are removed from this leave-home-as-soon-as-I-can standard, living at home with your parents for an extended period of time is perfectly normal. In cultures where moving out as early as possible is the norm, those who don’t face ridicule and disrespect from others. But there’s a quote that comes to mind:
Don’t worry about what other’s think. Because those who mind don’t matter and those who matter, don’t mind. - Dr. Seuss
What is Home?
Notice how I said earlier: “Move out of HOME.” There’s a reason for this. Home is where your family is, it’s where your heart is. 💟 When we leave home, we leave our (current) place of belonging and comfort. And there’s nothing wrong with getting out of your comfort zone, but when it causes financial discomfort, there may be a problem.
Of course, it’s not always this simple, in what are often bad situations, family life causes enough emotional pain or discomfort that moving out ASAP is probably the best course of action.
And a lot of the times, parents aren’t as understanding as we like. After all, everybody who knew you growing up will view you as an 11-year-old. It does take time and effort to earn the respect from our parents and to prove that we are capable adults in their eyes, and as adults ourselves we need to influence the kind of culture that is present in our living environment.
If you’re fortunate to have understanding parents that have built a healthy family culture, then that’s fantastic, your family is ahead of the curve.
It’s your Independence Day
If you’re still fairly young and reading this, now’s the time to act. You need to have independence. Mum shouldn’t be washing your clothes, and Dad shouldn’t be cooking every dinner. It’s time to pull your weight and gain some of the essential life skills and time management you need to have when adulting on your own.
If you’re in your 20s and reading this, living at home, and you aren’t pulling your weight already…then today is your independence day. When you’re done reading this, subscribing to Araminta’s email list & following her on all the social media platforms (thanks Ben 😉), it’s time to get up and wash the dishes, tidy the lounge room and vacuum. Just pull your weight. Remember your parent changed well over your body weight in poopy diapers - it’s the least you can do.
A shared weight or doing chores in a collective household makes light work for everybody. And this also means there’s more time for everybody to focus on things that are important for themselves - yourself included.
Funnily, this form of independence takes stepping away from individualism - a focus purely on benefits from oneself and how everything impacts YOU. Instead of a focus on collectivism - how you impact everything AROUND you. This is in a totally non-political sense, of course. This doesn’t mean foregoing the self. It means fitting your self-improvements into the bigger picture(in this case, your family), and how the bigger picture will fit you in. It is through this sort of family-centric-collectivism that independence truly shines.
The Intrinsic Benefits
The benefits can be a house of difference (pun intended). A lot of people don’t truly find themselves until they are in their mid-20s, and it is in this period we form the most meaningful and beneficial relationships.
If these relationships can include your family - parents & siblings you can form bonds that will last a lifetime, instead of the standard ‘continental drift’ that seems to happen with most families. A slow and steady distance that forms over the years.
Another benefit is a shared workload in a period of your life when everybody is looking to get the most out of their time. Your parents will find they have more free time. Now that they have adult children that no longer need diapers changed (I hope) nor do they need driving around - to school, various events, and gatherings. And adult children don’t need as much, if any, financial support.
And likewise you having these chores to share with your family will free up your time for experiences, education and to focus on growing your earning potential and skillset. Living with your parents is also a form of wealth transfer.
The Financial Benefits
The financial gains to be had by your family are a two-way street. You as a (hopefully) income-earning adult, are able to contribute to your parents’ income. This is achieved by paying for your room & contributing to the food and bills each week/month. This will ease the finances of your parents somewhat, allowing them to save more.
You yourself will benefit financially as well, as your parents will more than likely charge you below the going rate for room and board. Plus shared utilities and group meals cut down expenses significantly.
Why it’s a ‘House of Difference’
Now let’s take a look at how significant this financial benefit can actually be.
Say the average single apartment costs 1000€ a month to rent. And let’s also assume you pay your parents the same but this includes utilities and food as well.
There’s a fair bit more to pay on top of rent, but let’s keep it simple. Let’s assume you are relatively frugal and your utilities would normally cost 175€ and food 250€, a month. so the total sum is:
- Rent: 1000€
- Utilities: 175€
- Food: 250€
A total of 1475€/month. This means living on your own would cost a minimum of 425€/month more. This isn’t including other optional expenses either.
Spread this out over a year an that’s 5,100€ of savings. And once you take compound interest into account… that’s when the magic happens. 😛
Just spending one year in your 20s doing this, will make a difference of 76,300€ to your net worth by the time you hit your 60s. This is invested at 7% pa compounded per annum. And all these estimates are conservative.
Taking it further, with the extra free time you have thanks to a shared workload, you’re able to squeeze a bit more work out of your day/week. Let’s say…an extra…20%, that’s 50 hours a week. Not unachievable by any stretch of the imagination.
So even if you were earning a very modest 25k a year this suddenly becomes 30,000€. Let’s say this is 24,000€ after tax. If you’re only paying 12k a year in living expenses(staying with your parents) and giving yourself some extra spending money(4000€/year), you manage to save 8000€ a year…
Looking at The Big Picture
Now let’s look at interest over a 5 year period. 8000€ saved a year, invested at 7% becomes 60,400€. That, my friend, is potentially a deposit for a house of your own.
At the very least it could become a passive income stream in a dividend portfolio and produce say 3000€ a year(250€/month).
Best case it could be invested into a business of your own, applying the skills you have accumulated in those 5 years of hard work, and provide a livelihood for yourself and family forever.
The Downsides
A lot of people would argue the negatives with living with your parents, and yes, there are a few.
A societal stigma is attached to this and can look bad in the eyes of others. But do you really care what these people who would judge you for making long term beneficial moves think? These are the same people that would say it’s unfair you own a house in your 20s, while they squandered their prime decade away on frivolous decisions.
There’s also the argument that you do most of your growing up when you live independently. This is true. But the thing that makes you grow up is acting independently and taking initiative, not the art of living away from your family itself. Living with family can teach you a lot about tolerance, boundaries and proving yourself & your worth.
Family and people who have seen you develop will always see you as an 11-year-old until you show them you are indeed an adult. And it’s easier to show your adulthood by acting like one and earning the respect of your family as an adult. Rather than only seeing them a few times a year, leaving them with the memory of you being a child in the past dominating the evidence the adult you are now.
To conclude: It’s your call
Breaking societal norms and living with your parents for a longer period of time can have a lot of benefits. But you need to make sure it’s the right fit for you on a personal level.
If you can make it work you stand to benefit not only yourself but the people that supported you all through your life..and will probably continue to do so for the rest of it.
I personally lived with my parents until I was 26. This let me build enough wealth and work enough to build enough wealth to become financially independent.
I’d like to thank Araminta for the opportunity to write for Financiallymint.com. For those who don’t know me, I’m Ben. I write over on my corner if the internet, BlueDollarBull.com and create videos on YouTube. I create content about Investing, parenting and building generational wealth(aka creating old money). I teach people to achieve this by first focusing on the 3 types of capital before financial, creating a strong family culture and intentional living and preparation for future generations. I’d love to have you over one of my platforms.
Thanks again for reading!
Financially Mint Takeaways:
- Living with your parents can save you A LOT of money
- Living with your parents will help them respect you as an adult and not a child
- The money you save can help you build income streams, buy a house or even start a business. Always handy 🔥
- You get to free extra time by sharing chores - more time to focus on building skills and testing career paths.
I love Ben’s point on using your family house as a leverage for your career and finances, and you really can save a lot of money. Personally, I moved out of my family’s house as soon as I could (I was 17) simply because the atmosphere was pretty toxic emotionally, and I was sick of living on a farm in the middle of nowhere. So as usual, it does depend on your situation - but if you’re able to see the big picture, regard living with your family as a clever strategic move, one which could buy your house in the future 😉.
