Living with Parents at 23: Pros & Cons

[DaveC426913]

I really wish you old timers would stop comparing what it was like when you went to college to what college is like these days.

Some of us old timers have not fallen back on our own experiences to make our case. Some of us have not made any comparisons with olden days.

You think I want to live at home?

Well...

Considering the fact that my parents don't even care, and actually even want me to live back at home, then yes, I will gladly "mooch" off my parents.

...which is it?

 

[NeoDevin]

I should also point out that student loans are not the end of the world. I've payed for most of my undergrad on student loans (minus some from working over the summers). I haven't had to work while going to school, so I'm coming out with a fair debt load ~20k CAD. I'm graduating in about a month, I have a wife and a son, and we have managed to work our finances out so that by this time next year my student loans should be paid off, and by the year after we should have enough saved up for a down payment on an acreage (if everything goes to plan).

I've been living on my own since I started university (with occassional trips home to raid the fridge after thanksgiving).

Even taking the highest figure on the chart posted by gravenworld above, 22k/year, if you work 4 months each summer for ~2k/month (fairly low), you have 14k/year in student loans + living expenses ~ 25k (if you're living cheaply). Multiply by 4 years, ~100k. That's about 5 times what I have, so if I can pay mine off in 1 yr, with a son at home, there is no reason a single working man shouldn't be able to have student loans completely payed off in 5 yrs. The trick is to live frugally while in university, and then continue this after graduation.

It is perfectly possible to be debt free 1 yr after university and never have to work while studying. (If you go to public university, private ones, not so much, but even still, 5 years isn't that bad)

 

[Cyrus]

You have 20k in loans, he has 60k in loans, nearly 3 times as much Neo. I think your comparison is unfair.

 

[Moonbear]

Not possible today unless you get a full ride scholarship. I really wish you old timers would stop comparing what it was like when you went to college to what college is like these days. I worked 3 jobs during college and full time during the summer. You know what that was able to pay off? Books, rent, and utilities only. That's it.

I have friends paying for their own education right now. One is working his way through an engineering program...working as many jobs as he can get in the summers and one or two during the academic year and still does well in his classes. The other took a year off to work before going to med school. She's still going to need some loans, but works as much as she can so she can get them paid off quickly. If you're working 3 jobs and can only cover rent and utilities, you're paying WAY too much in rent. I'm appalled at what students today seem to expect from apartments, and how much they'll pay in rent for it. The apartment complexes here that cater to students seem more like country clubs than student housing...they have pools, cafes, gyms, spas, tanning salons, club rooms...it's insane! The way us "old timers" cut down our expenses was to either live in dorms, or find cheap apartments and cram 4 to 6 students into one...there was none of this everyone getting their own bedroom and bathroom nonsense...you shared two people to a bedroom...three if the landlord would let you...in a run-down old building, accepted the roaches or ants as housemates, kept the heat turned low in winter and A/C off as much as possible in summer, lived on a lot of ramen noodles, eggs and toast, and didn't buy new clothes until senior year when you got one suit to wear on your interviews...if you needed something before then, you went to the thrift shop.

And if you don't like the idea of living paycheck to paycheck to make ends meet, you can now appreciate how most of your parents started out life. Nope, it's no fun...that's part of growing up...being an adult means sucking up the fact that sometimes life isn't fun.

It is one thing to still live with your parents when you're in school and planning for your future, it's another to live with your parents when you're not in school and just using them so you can party rather than save up to move out.

What's interesting is that the people I've kept in touch with from "back home" who stayed with their parents the longest before moving out are the ones unhappiest with where they are now. Financially, they seemed better off, at least early on...I was still living in crappy apartments while they were already buying really nice houses because they had saved up tons of money while working their first jobs and still living home. They now regret that...they feel trapped, like they never got to go anywhere and now it's too late to just pick up and move since they're tied to houses, careers, spouses, kids.

By the way, comparing today's tuition to that 10, 20 or 30 years ago is meaningless unless you also want to compare wages/salaries at the time. Here's a hint...when I was in grad school, stipends were HALF what they are now, and required teaching, they weren't just handed to us to do nothing but research...housing costs (at least for rental units) have NOT doubled since then, neither has food. Fuel costs have...they've quadrupled, but wasn't much of a factor because students usually lived close enough to walk or bike to campus. But, we lived without TVs, without cable, without internet in the apartments, with the cheapest land line phone plan split among the roommates...no cell phones, no iPods, no PDAs...none of those are necessities, and one can save a LOT of money if they skip those. And, you learn how to have fun without breaking the bank. We'd have friends over and play cards all night...cards are cheap. Or, you do potluck dinners. Or, we'd take advantage of the student rec center's offerings and play a game of volleyball or basketball or sign up for the walleyball competitions.

So, especially when you get to the point where you are starting to feel like your parents are driving you nuts or you need more independence than they are giving you, it's time for you to grow up and take your life into your own hands...or put up with being miserable.

 

[Astronuc]

I addition to what Moobear wrote, what get's me is kids who get an education at a private school or even out of state public school, which costs $80 to $100 K, take out loans for that, and then complain it is isn't fair when they have to repay. One should know that going in - it's called planning.

Well, they could have gone to a community college for two years, or the in-state public university, and saved a lot of money - but they chose not to. And to top it off, they have a car, and maybe they party or travel on holiday, and live in much better apartments than I could have afforded when I went to school.

Don't whine about poor choices. One makes a choice - one takes the consequences.

 

[mbrmbrg]

At 23, I'm starting to hate it.

I spent my first two years post-high school studying overseas. For a while I was considering going to college in the city where my parents live and staying with them, but I came to change my mind. It was pretty scary calling up my mother to tell her that I loved her and all, but I didn't think I could stand living at home full-time: I felt a little too independent to regress into being a teenager living at home. And my mother was awesome. She said that was really great, because she and my father were worried about the same thing: if I came to live at home, they wouldn't be able to refrain from telling me when to go to bed, etc., and I'd go nuts.
So now I'm on full-tuition scholarship at a college in NYC, and I take out loans every semester to pay for dorming/food. But I can come home every weekend and be 100% happy to see my parents and siblings without added tension of "Ghosh, stop telling me what to do already." It's so worth it.

 

[Andre]

At 23, I'm starting to hate it.

But my expenses are huge. Often $400 in a single weekend to rent airplanes. No, I will NOT give it up, as I'm pretty much set on becomming a professional piltot, which means I NEED to spend that kind of money to get my ratings.

Plus, I'm about 90% sure I'll be going back to school this fall, so that's even more money.

Plus I have to have extra money for motorcycle riding and shooting guns and watching movies and stuff like that.

Any possible way I can start living on my own?

Or should I just live with my parents as long as possible to save as much money as possible?

To satisfy all desires, a few decades ago, one would join the Air Force and apply for pilot training. But times have changed, I guess

 

[gravenewworld]

I chose to go to a public university which I could afford, rather than a place like MIT which cost about 5-8 times as much. I simply didn't want to go into heavy debt to get an education. .

Instate tuition cost of the University of Delaware: $8100

Room and Board: $8000

Cost of books per year: $2000 (and yes I did spend $1000 a semester on books [even used ones] because math and chemistry books are hideously expensive)

Total cost per year of the University of Delaware, my instate public institution: $18000

Total amount of financial aid that was awarded to my family: $0

Total cost for 4 years at my instate public institution: $72000


Even if you try to move off of campus to save on room and board $350-$400 at the bare minimum will get an absolute hole of a place in Newark DE. Leases last a year so that is $4000-$5000 on rent alone for the year. Add in utilities, food, gas, cost of parking fees and you are still going to spend close to $8,000 on room and board.


My parents could only pay about $6000 per year out of pocket for college costs. That means I still would have had to come up with $48000 myself for 4 years of college. No matter how you look at it, I still would have had to take out a ridiculous amount of loans to pay for an education at my instate public institution.

 

[Schrodinger's Dog]

Come to England I'm sure even Cambridge doesn't cost that much. And that's with a ridiculously favourable exchange rate.

I think the average debt incurred at college is about £24,000 or $48,000. $72,000 seems a little pricey to me. Although, I think you might have to pay more if you're foreign? Don't know...

 

[gravenewworld]

$72,000 seems a little pricey to me. ..

Ha and that is the cost for an instate public institution. That's why I went to an out of state priavate school. After grants and scholarships that I got from the private school, it ended up being cheaper than my instate public university.

 

[DaveC426913]

My parents could only pay about $6000 per year out of pocket for college costs. That means I still would have had to come up with $48000 myself for 4 years of college. No matter how you look at it, I still would have had to take out a ridiculous amount of loans to pay for an education at my instate public institution.

Point of order: this did not start out using a particular PF member as a case study, and I don't think it should end up there. I've been trying to avoid that, because there's no way to separate out personal feelings from rational arguments. Further, it makes it very difficult to generalize for the benefit of others.

That being said, I'll go with it, as long as it doesn't get emotional or too specific.


It's quite laudable that you are setting your goals where you are. I guess my difficulty is that you sort of make it sound like you are the one making the choice, and that you are doing it in a vacuum.

Really, it's your parents' tremendous generosity that you are availing yourself of. This plan is working, not because you want it to, but because they want it to. I just hope that you (and by you I mean the Royal You - i.e. y'all) are appropriately demonstrative in gratitude.

 

[Schrodinger's Dog]

Ha and that is the cost for an instate public institution. That's why I went to an out of state priavate school. After grants and scholarships that I got from the private school, it ended up being cheaper than my instate public university.

I think the difference is most universities in this country are government subsidized. For example the Open University(OU) gets 50% of it's funding from the Gov. Where as somewhere like Cambridge probably gets very little, but in between it's probably that a substantial amount of Universities costs are covered by the government, so you can at a guess probably knock 25% off the fees straight away.

A 6 year degree p/t at the OU will probably set you back about £7000 maximum, but of course the OU has half of that paid by the government and doesn't house students generally. A little known factoid as well is that the government will pay for anyone to go to University for free with the OU if they have never obtained a degree. Which is awfully decent of them.

Of course foreign students would probably be charged full whack, so you could probably pay more than £30,000 pounds I'd imagine.

 

[lisab]

No one's saying it's easy, but there are ways to make it more affordable.

Go to a community college for the first two years.

Go part-time.

Find an employer who offers educational benefits. Most big companies will do this, and they don't have to be technically-oriented companies (UPS comes to mind). MIH works at the University and attends at a greatly reduced cost - what a great idea!

 

[Moonbear]

Ha and that is the cost for an instate public institution. That's why I went to an out of state priavate school. After grants and scholarships that I got from the private school, it ended up being cheaper than my instate public university.

And that's part of the responsible decision-making process, to look at all your options and decide which is best for your situation. We have a lot of out-of-state students attending WVU because out-of-state tuition here is considerably lower than their in-state tuition if they lived home, and so is room and board (tuition plus room and board here last time I checked was either slightly less or about equal to just tuition alone in some other states...and if they move off campus to share a cheap apartment, it's definitely less, even factoring in travel costs to get here and back to their home state...it's actually still very comparable to the cost of education when I was in school and wages for summer or part-time jobs are a lot better than they were then). The education they get is just as good, so it makes no sense for the students that stay in state to gripe about the cost and needing to live with parents to afford it when they could have moved away from home and paid less. Of course we can't accept every student out there, but it's just an example that there are still plenty of options where students can easily afford an education if they quit whining and look at their options.

 

[g33kski11z]

...I work at the university where I study and that allows me a 2/3 off employee discount on tuition...

That's like the situation I'm in. I work for a University and they cover all of my tuition cost. But, the best part about it is that I served in the military {Marines} and I also get to collect the MGI Bill. So I actually get paid to go to college...

.. although, I am a single father and with an 8yr old and 40+ hrs of work, I can barely do 2 classes a semester.. so it seems like forever until I get my degree..

 

[NeoDevin]

You have 20k in loans, he has 60k in loans, nearly 3 times as much Neo. I think your comparison is unfair.

And if I can pay it off in one year, with a family to care for, there is no reason he should not be able to pay it off in three years.

Edit: And remember, I was just making some ball-park estimates. The end result is, unless one is very poor with their finances (or manages to rack up upwards of 300k in loans) there is no reason one should be paying off for more than 5-10 years, while living on their own. Even 10 years is ridiculous. It's not unreasonable to expect to find a job which pays 35k/year (16$/hr. 40 hrs/week). 15k is enough to live on if one lives frugally (and that's not doing without too much either), which leaves 20k to put towards the loans. Thus 60k ~ 3 yrs...

Edit2: I could go back to my previous job as a janitor and make 35k/year, so please don't anyone suggest that you can't make that. I could also go back to bartending and probably make closer to 50k.

 

[gravenewworld]

Boy would I love to hear how to pay off $60K in 3 years.

If you make $45 K a year, which is a reasonable estimate for a salary for a new college grad, 33% of that automatically goes toward taxes, 401 K (you would be incredibly stupid not to contribute since you would be throwing away free money from your company), and health insurance. That leaves you with $30 K in disposable income. So you say should easily be able to contribute $20k automatically to student loans? That would leave only $10000 a year to live off of. That is simply not feasible. If you found a place to rent for $300-400 a month (which would be a hole in the wall in a dangerous neighborhood probably) that would automatically be $4200-4800 or almost 40-50% of your DI (assuming $20K goes towards loans). Rent alone would eat up almost all your loot.


This is also completely ignoring the rising cost of food, the rising cost of gas, car insurance, utilities, and most important of all, interest on the loans.

 

[NeoDevin]

Sorry, I meant after-tax income in my post, my bad. It is perfectly possible to live in reasonable comfort for 15k/year (including rent, utilities, and food). You're not going to be living the lifestyle of the rich and famous, but you should never go hungry or do without. Obviously, if you choose to put money into a 401k or similar savings plan, then you will have less to pay on student loans. That is your decision, and not everyone has company matching 401k or similar. I am deciding between a couple positions, and only one of them offers this. If I get a job without company matching, then I won't contribute anything to retirement for at least my first 2 years out of university. If I get a job that has it, I may decide to take longer to pay off my loans, I'll work it out and see which is more profitable.

35k after tax - 15k essentials = 20k. Decide how much you're willing to spend on other stuff, and put the rest towards your loans.

Don't own a car, live in an appartment so utilities are low, and pay off your loans quickly before the interest compounds too much. Remember, you may be `throwing away free money from your company', but every month you extend your student loan payments, you're throwing away money as interest on them. Depending what your company is willing to match (if anything), the interest you expect on your 401k, and the interest charged on your loan you can work out which plan makes the most sense for you.

My point is simply this: It is perfectly possible to have your student loans paid off in a few years. Whether or not this is the best plan for any particular person is up for debate.

 

[Cyrus]

And if I can pay it off in one year, with a family to care for, there is no reason he should not be able to pay it off in three years.

Edit: And remember, I was just making some ball-park estimates. The end result is, unless one is very poor with their finances (or manages to rack up upwards of 300k in loans) there is no reason one should be paying off for more than 5-10 years, while living on their own. Even 10 years is ridiculous. It's not unreasonable to expect to find a job which pays 35k/year (16$/hr. 40 hrs/week). 15k is enough to live on if one lives frugally (and that's not doing without too much either), which leaves 20k to put towards the loans. Thus 60k ~ 3 yrs...

Edit2: I could go back to my previous job as a janitor and make 35k/year, so please don't anyone suggest that you can't make that. I could also go back to bartending and probably make closer to 50k.

Does your wife also make an income?

 

[NeoDevin]

She is a stay at home mother for now.

 

[gravenewworld]

Don't own a car, live in an appartment so utilities are low, and pay off your loans quickly before the interest compounds too much. Remember, you may be `throwing away free money from your company', but every month you extend your student loan payments, you're throwing away money as interest on them. Depending what your company is willing to match (if anything), the interest you expect on your 401k, and the interest charged on your loan you can work out which plan makes the most sense for you.

My point is simply this: It is perfectly possible to have your student loans paid off in a few years. Whether or not this is the best plan for any particular person is up for debate.

-Have to drive to work

-401k grows at an exponential rate, you would still be incredibly stupid not to put money towards a 401k when your company matches what you put in. interest on student loans is also tax deductible

-20k a year is a lot. Using that logic if I had 35K after tax income (which would be about a 50K per year job) I could buy a $600,000 house with a 30 year loan. That wouldn't be reasonable either.

 

[Moonbear]

-20k a year is a lot. Using that logic if I had 35K after tax income (which would be about a 50K per year job) I could buy a $600,000 house with a 30 year loan. That wouldn't be reasonable either.

No, because you're not factoring in the interest you'd be paying on the mortgage over those 30 years, the downpayment required, property taxes and insurance based on the value of the home, or the added cost of utilities for a home of the size that would cost that much. Or the fact that while it's one thing to live frugally for a 2 or 3 year goal, you might not want to live on that budget forever.

Similarly, if one can save like that to pay off a student loan quickly, you can then spend the next couple years also saving like that for a downpayment on a modest house, and then once you're used to living frugally, you can put what you're accustomed to saving into that 401K or a college fund for your kids so they don't have to struggle quite as much.

As is being pointed out, it's POSSIBLE. It doesn't mean you'll want to choose to give up an employer contribution to a 401K to pay off student loans, but if you don't get an employer contribution, you might be better getting the loans paid off quickly and THEN putting more into a 401K. You'd have to do the math for yourself in your own situation to figure which works better for you. What you CAN do and what you WANT to do are clearly not the same thing, but making those choices for yourself and living with their consequences are part of being an adult.