4 Ways to Gain Financial Independence from Your Parents
Becoming financially independent from your parents can seem daunting. For many, it means getting a job, moving out, opening a personal checking account , establishing credit, and saving. This can be a tall order for those who have no experience with finances or living on their own. Read these tips below and get an idea how to launch into financial independence successfully.
1. Get a job
The first step to becoming financially independent is earning an income that doesn’t come from your parents. Finding (and keeping) a job will not only help your pocketbook, but will also help you establish your employment history.
First, find a job that pays a salary or wage that meets your financial needs. If you have little or no work history, finding a job that pays well can be difficult. In this case, you’ll have to find creative ways to live within your budget. If your circumstances make it impossible to reduce your living expenses, you may need to consider taking a second job.
If you’re a student, full-time work may not be an option. That’s why working a part-time job during the school year is a great way to earn extra income and build your résumé.
2. Don’t live with your parents
Once you have enough income to move out of your parents’ home, do it. While it sometimes makes sense for young adults to stay within the safety net of their parents’ home in order to save money, it doesn’t necessarily make you a financially independent adult.
If you’re living separately from your parents in a house, apartment or dorm and they’re still paying for it, try to slowly take over or partially pay for the rent and utilities. If the rent is too expensive, find a more affordable place or consider living with roommates.
3. Stick with a budget
In other words, don’t spend more than you make. The best way to keep track of your finances is to open a personal checking account online. Online checking accounts make it easy to track deposits and withdrawals, view your spending habits, and pay your bills. If you want to avoid fees, look into opening a checking account with no monthly balance requirements or a student checking account. For those who expect to maintain a higher balance, consider opening a checking account with interest.
Learn to manage your money responsibly. Pay your rent and bills first and then budget out what you have left for essentials like food, gasoline and household supplies. Then, put anything you have left into savings if you can.
Remember to also treat yourself occasionally. It’s okay to enjoy your independence by going out with friends or buying a new video game. Just make sure you can afford it first.
4. Save for a rainy day
If you want to achieve long-term financial independence and stability, the time to start saving is now. From saving for a vacation or new computer, to having extra money to pay off unexpected bills and expenses, having a healthy savings account offers many benefits. Plus, without a savings account, you might have no choice but to go to your parents when you need extra money.
Remember, being financially independent doesn’t mean you’ll never need help again. Everyone needs a helping hand sometimes and it’s okay to ask for assistance when you really need it. However, by maintaining employment, a budget, good credit and savings, you’ll find yourself less dependent and more financially independent.
Excellent advice Chris. As someone recently moved out from home, am certainly seeing the need for having and sticking to a budget. If anything its helping control my budget and temptations to spend on items driven by peer pressure. Additionally, it does help in the savings department…I think saving as much when you are younger is a very prudent move, your savings and investments benefit from time and compund interest. Also when living on your own things break and you’ll need savings or an e-fund to repair them when that happens.