The majority of Americans think that young adults should be financially independent by 22, but the truth is only 25% of them are. What strategies can help to become financially independent sooner?
It is well known how expensive it is to raise a child, from birth until he is 18. But not that much is said about the money parents spend on their sons and daughters after that.
According to a U.S. survey, financial support from parents to young adults (ages 18 to 29) is most often for household expenses. These expenses (household or grocery bills, for example) cover 60% of the cases, education 40%, rent or mortgage 40%, and medical expenses 35%.
This, together with a tendency to put off marriage, buying a house, or having children, lead to young adults who depend, to some extent, on their parents.
If you are a Millennial but are seeking to end this trend, here are some tips for you to become financially independent from your parents sooner.
Learn a trade
If you’re a millennial working a low-wage, part-time job while going to school, an option is to learn a trade. The great thing is that you can quickly learn a new skill that often pays well. Skills like construction management, auto mechanic, or software development are among the highest-paying trade jobs, and learning a trade many times doesn’t require a huge investment.
Get a side hustle
Working a flexible side hustle is another option. You can use the hours you are not at school to do things like driving for Uber, delivering food, or delivering packages with Amazon Flex, babysitting, pet sitting, or testing apps and websites.
Cut down on living expenses
If living with your parents is an option, you can do so and save up as much as you can before moving out on your own. After that, you can choose to live with roommates to reduce your monthly expenses significantly. A tiny home may also be an option to consider.
Save at least 10% of your income
Start saving 10% of what you make, no matter how much you earn. This is good advice for Millenials, but it is useful throughout your entire life, so it’s good to start this financial habit early. This ensures that you’ll be building up savings to support yourself when you become completely financially independent.
Focus on needs, not wants
Saving money is, of course, the key to financial independence. Needs are what you absolutely can't live without, wants are things you can live without, but would rather have. If you learn to differentiate needs from wants, then you can start to save the money you would, otherwise, spend on unnecessary things.