No matter your plans for your life after college graduation, the high cost of living, limited job opportunities, and considerable debt can become significant barriers to your success in achieving your goals. Circumstances like divorce or job loss can also make living independently a challenge. As a result, you may find yourself in the position of having to “boomerang” – that is, having to return to your childhood home to live with your parents. Although boomeranging may feel like a setback, a temporary return to living with your parents can present opportunities to improve your financial situation.
Benefits of “Boomeranging”
For example, living with your parents means you can share the cost of rent, utilities, and food, resulting in reduced expenses. By establishing a realistic budget, you can make the most of these lower costs, and repay student loans or other debt more quickly. You can also build up savings for emergencies and long-term goals, such as buying a home of your own. A sound plan is to avoid additional debt while you’re working toward your financial independence. You also might consider paying expenses in cash to reduce your reliance on credit and help you stick to your budget.
For best results, establish clear expectations for both you and your parents before you move in together. Consider a written agreement that outlines the financial responsibilities of everyone in the household, and what the consequences will be for not living up to your promises. In addition, determine specific milestones you want to reach before you move out, and communicate them clearly. Goals could include accumulating $5,000 in savings, or reaching a six-month work anniversary at your job.
Creating an achievable financial plan can provide a welcome path toward the future you envision.If you have questions about the process of “boomeranging”, please contact us at Cisco & Co CPAs. We have suggestions and tips that can help you prepare.