You Can Still Make it

More A Hispanic woman looking at a savings jar of money. Are you developing a plan for how to spend your money?(GETTY IMAGES) IF YOUR landlords are your parents, at least you're trendy. A new report from the U.S. Census Bureau found that there are now more young people – those between ages 18 and 34 – living with their parents than any other arrangement. That's one out of three young people. Now, those numbers are slightly misleading because that includes college kids living in dorms, and more young adults are going to college than in the past, the census report points out. It can be frustrating being an adult and still living with your parents, but remember, you're doing this for a reason. Maybe you're looking for a job, or a higher-paying one, or perhaps you want to save up for a house. [See: 8 Big Budgeting Blunders – and How to Fix Them.] But hopefully you aren't only saving money. With any luck, you're also developing a plan for how to spend your money. That may be the most important thing you do with your time before you move out. And if you don't have a plan, these tips will get you started. Budget for the life you'll have once you do move out. Think about what you'll be spending on expenses like food, transportation, utilities, health care and entertainment. And you may assume that your rent will suck most of the oxygen from your budget – but it actually shouldn't. "You can use online calculators to help you figure out how much rent you can afford. Some rent calculators suggest that your monthly rent should be one-fourth of your monthly salary. So, if you make $4,000 per month, your highest monthly rent should be $1,000," says Ali Wenzke, a Wilmette, Illinois resident who founded the blog The Art of Happy Moving. She adds that many landlords require your annual income be 40 times your monthly rent. Going with that logic, she says, "your annual salary would need to be at least $40,000 for an apartment that costs $1,000 per month. In other words, your monthly rent should be between 2 to 2.5 percent of your annual income." Make a plan for living cheaply when you do move. Maybe you know you'll be making great money when you move out. Maybe you already feel financially secure because you have a lot of money saved up. You'd still be smart to spend like when you were living with your parents or back at college, according to Joshua Wilson, a partner at WorthPointe Wealth Management, a financial planning firm in Dallas. Wilson says he has seen a lot of young adults spend paychecks on things like new cars and apartments in the trendiest parts of the city. "That doesn't say successful to me. It just screams entitled or unwise," he says. Wilson also says that if you budget as if you were back in your eating ramen noodle days, "you'll find more things that need to be budgeted for than you realized, and you'll find that Mom and Dad probably paid for a lot more than you realized." [See: 12 Shopping Tricks to Keep You Under Budget.] Matthew Massee, a 28-year-old SEO analyst for a personal injury law firm in Salt Lake City, agrees. He moved out on his own when he was 23. While his peers were buying flashy cars, new phones, going on exotic vacations and eating at expensive restaurants, he took public transportation, used a cheap phone, only took vacations if he had a free place to sleep and rarely ate out. "I was able to quickly pay off my loans and create a comfortable emergency fund," Massee says. Learn as much as you can about your new home. This is easy to do if you're moving not too far from college or your parents' place. But it can be tricky if you're moving far away, even with internet sleuthing, and you might find that you're so glad to lock up a place to live from afar that you forget to think about much else. Weston Harris, a 25-year-old industrial designer, learned that the hard way. Harris graduated from college in 2015 and lived at home for a year before moving from Chicago to Los Angeles. "I didn't realize my apartment would be over an hour commute each way to work. As a result, I had little time for a social life," says Harris, who just moved this month to a new place closer to his job. Use the time at your parents' home to improve your credit score. Harris's mother, Jaime Baum, co-signed a credit card for him and his three brothers, so they could establish their credit. "You can't rent an apartment without a good score," she says. True enough – or at least, you're making it much harder on yourself if you have bad credit or virtually no credit history. And according to a 2016 report from TransUnion, a credit reporting agency, that analyzed 10 million credit scores, 43 percent of borrowers ages 18 to 36 have a credit score of 600 or below. More than 700 is considered good. Learn to cook. Use your parents' kitchen and make them some meals. They'll appreciate it, and your wallet will thank you later. "Dining out adds up," Wenzke says. "Learn to make a few simple dishes. If you're short on time during the week, make meals on weekends that you can freeze to use later." Massee believes that by learning to cook, he has saved thousands of dollars a year that would have gone to restaurants. Tap your parents' knowledge. Your mother and father have more to offer you than a roof, cable TV and their kitchen. They could pass along what they've learned about money. If not your parents, find someone else who you look up to, advises Ryan Kwiatkowski, 30, who works in marketing for a company called Retirement Solutions, Inc., in Naperville, Illinois. Kwiatkowski says that before graduating college in 2010, he had a long talk with his parents about what expenses he would encounter living on his own. He says they brought up potential factors he hadn't considered, like having to put down a security deposit for his first apartment, paying for car maintenance and buying business suits for work. [See: 6 Ways to Treat Yourself on a Budget.] "It was one of the best discussions I've ever had," Kwiatkowski says, adding that he has no debt, while some of his friends are still buried in student loans and living paycheck to paycheck. So get your parents to spill their financial secrets. Talk is cheap, but the advice may be priceless.