A Guide for Moving Back in With Parents to Save Money


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If you are contemplating moving back in with your parents to save money, you are not alone. Adults age 24-39 have been moving back into their childhood rooms for the last several years for many reasons. However, that trend is now on a rapid upswing. The reason…COVID.

According to PBS, the trend to move back home with mom and dad has only increased due to the raging COVID pandemic. While the pandemic is not the only reason why adults are moving back in with parents to save money, it is one of the main reasons.

Prior to the pandemic, there were a lot of millennials moving back home for other reasons such as paying down astronomical student loan debt that had been incurred. They simply couldn’t afford to cover their student loan payments and the costs that typically go along with adulthood such as rent and mortgages which are symbols of passage into adulthood.

The pandemic has made that trend much worse with job losses and shuttered businesses becoming more common day by day. Work at home orders, low rates, and people leaving apartments have basically stopped the housing market from functioning normally as MLS listings have simply dried up. With loss of income imminent, adults are struggling to pay for housing, let alone find any that’s affordable or cheaper than what they had. Housing is up 93% over the past 11 years according to the National Association of Realtors with a median sales price of previously owned homes at $314,300.

The obvious choice for many adults (young and old) is to move back in with parents to save money. This guide will reveal tips and advice on how to survive such a transition as moving back home along with benefits and things to consider.

Is Moving Back in With Parents a Good Idea?

Becoming an adult isn’t easy. Many adults fall victim to living a keeping up with the joneses lifestyle. If you are saddled with debt, midlife, and out of work, you may be considering a return to mom and dads house permanently. Moving back in with parents is a good idea particularly if you are going through a transitional period in your life such as job loss, paying down debt, a divorce, bankruptcy, or saving for a house. Moving back home is a great way to rebuild your finances and save towards whatever goals you may have.

It’s also a good idea to move back in with your parents if you are trying to make personal life improvements such as a career change, recovering from additions, or going back to school. By living at home, you have less day to day responsibilities which allows more time for you to focus more on your life improvements. Moving back in with your parents is one of the best strategies for how to build wealth fast since it can allow you to save up capital quickly.

Is it Shameful to Live With Your Parents?

There is a stigmatism that exists when it comes to living with parents. A lot of people believe that it is shameful to live with your parents and portray it as some type of failure that you had to move back home. However, that simply is not the case. It’s not shameful to live with your parents, but rather accepted more today than any previous generation especially with the millennial generation. The main reasons are that student loan debt has crushed this generation so much financially, they simply have no choice to move back home. A lot of millennials have student loan debt and that’s why so many are more accepting of others who live with parents rather than see it as shameful or an adulting failure.

How to Save Money by Moving Back in With Parents

You can rebuild your personal finances by moving back in with your parents. Some of the best ways how to save money by moving back in with parents would include eliminating your housing costs, paying down debt (including student loans), building up your credit, saving for a mortgage, and eliminating daily spending habits.

how to move back in with parents to save money

While it’s not easy moving back home, your personal finances will thank you for making the sacrifice. It can also be a great way to achieve financial independence much sooner, decades ahead, if you take the appropriate financial steps while living with parents.

Below I will cover the different areas how to save money by moving back in with your parents.

Reduced or Eliminated Housing Costs

Housing is one of the largest monthly expenses for most people. Eliminating your housing costs can save a lot of money each month. You can save money on housing by moving back in with your parents. You won’t have housing expenses such as a mortgage, property taxes, water bills, or other monthly utilities when you move in with your parents.

It is possible that some parents might want some contribution towards housing costs. This is still a great way to rebuild your finances because even if you have to contribute some income. Chances are that the income you contribute will end up being a lot less than what your previous monthly housing costs were. Also, it’s a great way to help out your parents who might be struggling themselves given the cost of prescription prices and other living expenses elders often face.

Slash Your Debt

Slashing your debt is another great reason to move back home with your parents. Focusing on paying down debt can help you get ahead in your life. By reducing your housing costs, you will have available income each month that you can put towards debt reduction and elimination. You can use a personal finance flowchart to help prioritize which debt to tackle first.

The pandemic has made credit card debt increase significantly. This is especially true for people who were laid off while waiting for their unemployment benefits to start. One individual has incurred over $20,000 in credit card debt in the course of only nine months.

Move Back in With Parents to Pay off Debt

Some of the ways you can slash your debt by moving back in with parents are noted below:

  • Pay off student loans
  • Reduce credit card balances
  • Pay back 401k loans
  • Refinance auto loan payments
  • Pay medical debt
  • Negotiate debt owed on private loans

If you just have too much debt, consider filing for bankruptcy while living at home. While it will hurt your credit report, if you owe substantial debt, this might be the best option.

Build Up Your Credit

Another financial benefit to moving back home is to build up your credit. Chances are if you have been without a job and have no savings, you’ve had to charge a lot of everyday living expenses to your plastic lifelines. Your credit has probably taken a hit as well if you have been unable to make the payments. There are a lot of easy ways how to improve your credit score and moving back home can help you achieve that.

Credit card debt is not the only item that can affect your credit score. Things such as auto loans, utilities, and even cell phones as well can lower your FICO score.

By moving back in with parents, you can work on fixing your credit. You can repair your credit yourself by focusing on a few account balances to pay off.

Supercharge Savings

Obviously one of the main goals for adults to move back in with their parents is to save money. You can supercharge your savings by eliminating or significantly reducing your household and daily living expenses. One of the top benefits for moving back in with parents to save money is when it comes to housing.

Live With Parents While Saving for a Mortgage

A lot of young couples and families move back home with parents to save for a mortgage. This is especially true if they are coming from rental housing. Most rents now a days are significantly higher than actual mortgages. This is mainly due to interest rates being so low, and housing being so limited in supply.

Therefore if you are renting you will have a hard time trying to save for a mortgage and down payment while also paying your monthly rent as well. Living with your parents will help you save for a mortgage down payment.

Moving Back in With Parents to Save for a House

You may also want to consider moving back in with parents to save for a house and pay cash outright. It takes 30 years with traditional mortgage financing to pay off a house. During that time you will have less monthly income available because it’s all going towards your monthly mortgage payment.

However if you want to save money for a house fast and pay cash, it makes sense to move back in with your parents. You’ll be able to achieve financial independence much earlier and won’t have to worry about your huge monthly mortgage amount.

Spend Less on Essentials

Spending less on essentials is another way how to save money by moving back in with parents. Once you move back in, there will be a lot of essentials that you will no longer have to purchase. I moved back home briefly and had around 50 things I stopped buying that I used to.

It was a great way for me to save at least $200 a month on essential stuff I used to buy. You don’ realize how much everyday essential items that you don’t need add up to be over the course of a year.

Some of the essentials you will spend less on when moving back in with parents are below:

  • Lawn Maintenance
  • Household repairs
  • Cable TV
  • Household equipment
  • Internet
  • Home knickknacks
  • Water bill

Spending less on essentials is one clear way how you can save money by moving in with parents as an adult. Even splitting the costs with family is one way how to save money on streaming services which is common when you live at home.

How Much Can You Save by Moving Back Home?

There is no question that moving back in with parents will net you savings in several ways. If you are older in life and more established with a house and other essentials, you will save more money than someone moving back home after college. Granted, I am not figuring in debt owed at this point, but just focusing solely on the housing cost reduction you will have, it’s easy to see why many adults are choosing to find places to get free wooden crates, pack up, and head back home.

You can easily save 25%-35% of your monthly income if you move back home just by focusing on your reduced housing costs. With the elimination of a mortgage, home insurance, and property taxes there is no question that a 25%-35% savings is possible. If you previously rented an apartment, you can expect to save 15% to 30% if you move back home with your parents. While rents do vary and fluctuate, you won’t be paying thousands of dollars a month in property taxes which should make prior apartment housing costs less than homeowner costs. Additionally, there are a lot of moving hacks to save money when you move.

Set Savings Goal

What you do with the money saved from living with parents ultimately depends on the savings goals that you set. You can create a monthly budget based on living at home with parents. This will help you identify savings and apply extra income to your savings goals. You can use your new income for new initiatives such as rebuilding savings accounts, increase retirement savings, or starting up a new initiative altogether.

Maybe you want to focus on planning for your retirement. Living at home temporarily is a great strategy to save and plan how to retire on 500k so you can quit working.

What You Gain and Sacrifice When Moving Back in With Parents

There is no question that you sacrifice and gain a lot by moving back in with parents. While it can be a struggle going from adult freedom to parental oversight, there is no question that the potential gains outweigh the sacrifices made for most adults. Below are some points to consider if moving back home with your parents is worth it to you.

Advantages of Moving Back in With Your Parents

Moving back in with your parents as an adult is a decision that a lot of adults struggle with. A lot of adults have to ask themselves this question “is it really worth it to move back home to me?” For most adults, the answer is a resounding yes.

Some of the benefits of moving back in with your parents are noted below:

  • Saving money
  • Achieving financial freedom sooner
  • Having a support system available
  • New opportunities to try new ventures

The biggest benefits of moving back home is that you can really supercharge your finances by extreme saving. The other big benefit is that you have more available time and money to try new ventures. If you have ever considered starting an online business, moving back in with your parents is a huge advantage. You can focus on starting your new venture while living at home and dedicate some of your capital towards the startup.

There are so many online ventures available now a days such as how to start an online video game store that could be started from your parents basement. By living with your parents at home you can handle the risk that comes with starting a business since you are already saving on everyday expenses.

If you are looking for more passive businesses you can start a blog as well as an online initiative.

Drawbacks of Moving Back in With Your Parents

As an adult, moving back in with your parents is a huge lifestyle change. That comes with a whole new way of living and that can be a big adjustment for a lot of adults and millennials.

Some of the most common drawbacks of moving back in with parents include the following:

  • Reduced freedom
  • Lack of Privacy
  • Potential for family disagreements
  • Less of a social life at home
  • Voided dating life

It may be hard to decide whether or not it’s worth it to move back in with your parents. Some of these drawbacks such as lack of privacy and online dating may not be worth the advantages. The biggest drawbacks are that you will give up a lot of your freedom in your current life. Additionally, you will have unsolicited advice given as well by your parents which sometimes may not always be positive. A lot of adults may not be able to deal with these disadvantages.

Alternatives to Moving Back in With Parents

If you are not able to move back home with parents, there are some alternatives which can also help you save money as well each month. The most popular alternatives to moving back in with parents would include living with relatives, low cost housing options, or taking in a roommate. While it may not be as good as living with your parents financially, these are also really good affordable housing options to help get your finances back on track no matter what your challenges are.

Live with Relatives

Living with relatives can be a great alternative to moving back in with parents as this will also allow you to save money each month. Living with relatives is also a bit more removed than living with your actual parents so there may be more boundaries respected with a relative than with parents. If your relative has never had kids, they may also treat you more like an adult than an actual kid.

Low-Cost Housing Options

You can also look for low cost housing options instead of moving home. There are many unconventional housing options that can allow you to reduce your expenses significantly from traditional housing or even renting. I moved out of my house as an adult and moved into a housing cooperative which allowed my to save $20,000 per year.

Rent Rooms

If you are fortunate to have a large house, consider renting out rooms as an alternative to moving back in with parents. Renting out rooms in your house can help defray most (if not all) of your monthly mortgage costs. You could also rent out rooms as a short term stay for people just looking for a place to stay for a couple of nights. You can use sites like Airbnb and VRBO to list your room availability online.

Live in a Multifamily Unit

If you don’t think you can stomach a stranger in their bathrobe in your bathroom (and rightfully so), consider selling your house and buying a multifamily unit. While you would still be living in the same building with others, you would also have your privacy. No worry about strangers sharing your living space with you with multifamily units as each unit has it’s own entrance and living quarters. These quarters are separate from yours. This is another alternative to moving in with parents that still allows freedom and privacy of your life.

Summary

Moving back in with parents to save money is a major life adjustment for any adult. Additionally, it also requires a lot of planning. There are clear disadvantages and you will give up some of your freedom and current lifestyle that your currently live.

However, there are a lot of pros as well to moving home. For one, you can save substantial money by moving in with your parents. You can also use your saved income to get out of debt and improve your financial situation by leaps and bounds.

Additionally, you can jumpstart your retirement and also save for a house while living with mom and dad. Also, you can focus on new initiatives whether those are for a business or personal.

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