Top tips for financial independence when adulting

Top tips for financial independence when adulting

If you want to financially break up with your parents this article is a must-read. Here you will find out all the details you must know. Keep reading to discover the most helpful information!

If you want to financially break up with your parents this article is a must-read. Here you will find out all the details you must know. Keep reading to discover the most helpful information!

Let’s face it: Adulting isn’t always easy. Managing credit cards, paying off student debt and budgeting—all without help from mom and dad—can be overwhelming. 

Whether you live with your parents or just tag onto their cell phone plan, many millennials who rely on their parents for financial help say student loans are the reason. So how do you get them under control? First, know your options for repayment and consolidation, which could reduce your payments. You may be able to pay off your loans over a longer period, or you may qualify for an income-based repayment plan, both of which could also lower monthly payments.

Whether you live with your parents or just tag onto their cell phone plan, many millennials who rely on their parents for financial help say student loans are the reason.

After doing some research, you may find it makes financial sense to accept help from your parents for a bit longer if they’re willing. Just be sure to consider their expectations, as well as any quality-of-life implications, in your decision.

A good credit score can help you with everything from renting an apartment to landing a job, and since longer credit history is generally better, it’s good to start building credit early. Ideally, you want to have your own card so you can be totally in control of the purchases and payments.

If you don’t yet have a credit card, consider applying for a secured credit card, which uses a security deposit as collateral. This can help you build credit. Sharing a card with your parents can do that, too. If you’re a joint cardholder, the card becomes part of your credit history. 

If you’re a joint cardholder, the card becomes part of your credit history. 

Gear up to pay rent by depositing a rent-like amount into a savings account each month. This helps you get used to the line item in your budget, and you can put the money toward a security deposit, or even a down payment, when you’re ready to live on your own. If you already pay rent to your parents, see whether they’ll consider using the money to help you get on your feet by contributing to a savings fund or helping with student debt.

If you, as a teen, opened a bank account with your parents, you may still share it. Now that you’re paying your own bills, it can help to have your own account. Removing someone from a joint account can require planning—generally, both parties must be at a branch in person to sign paperwork.

An alternative is to open a new account just for you and eventually close the one you shared. If you’re navigating two accounts, be sure to keep your parents informed, especially if you plan to transfer money from your shared account into your solo one.

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