It’s no secret the pandemic has wreaked havoc on our financial lives — and young adults have been among the most impacted. For the first time in more than 130 years, the majority of 18- to 34-year-olds are living at home with their parents, according to a new U.S.-based Pew Research study.
While there’s nothing wrong with the extra quality time in theory, you may be eager to improve your finances and eventually move out of your parents’ house — which could take some planning.
“Now is not the time to just wait and see,” says Bobbi Rebell, a certified financial planner and personal finance expert at Tally. Here are some ways to craft a financial plan and create an exit strategy.
Assess your income
If your hours have been cut or your opportunities have slowed down, it may be the perfect time to work on other streams of income. There may be other ways to make money — like online tutoring, for example — until the job market in your field improves.
If you haven’t found a job in your field for the past six months, Rebell says you may also consider trying something new or reassessing your skills. You may decide to improve your skills to shift into a new field altogether.
Boost your savings
If your parents aren’t asking you to chip in for the cost of living expenses, it may be possible to build your savings. Before you move, save enough for a rental deposit, moving expenses, and a small emergency fund. If you’re planning to move to a new city or state, start researching the average cost of living in the area and create your own sample budget including all of your expenses (rent, student loans, groceries, etc.)
Work on boosting your credit score
If your credit score is less than perfect, now is a great time to improve it. “Given the uncertainty, more landlords want tenants with good-to-excellent credit scores,” Rebell says.
To realise the biggest improvements, focus on making on-time payments (35% of your score) and reducing your credit card balances (30% of your score). There’s a complete breakdown of all five factors that impact your credit score here.
You should also check your credit reports for errors that may be hurting your score.
Consider your move carefully
It may take a while to find an apartment that fits both your needs and budget — so you should try to be patient during the search. Try moving during a less popular time — like during the winter — to score a deal on moving costs and rent.
You may also get a deal on rent agreeing to live someplace for longer than average. “Landlords don’t make money if an apartment is empty, so they’re more likely to agree to lower rent in exchange for a longer lease,” says Rebell.