New College Graduate - Move home?

I've made a thread or two prior to graduating about this, but I just graduated from college and I have not lived back with my parents since I started college 4 years ago. After I graduated, a friend bought a house and I moved into the house with two other friends, in a "sketchy" area but a nice house. Rent is only $550 with utilities (very cheap in our area) and my budget expenses come out to be $1530/mo.

I start my full time job on Monday making $54k annual. I have estimated after tax, will be $37,800 (70% of my pre-tax) After taking out expenses, my disposable income per month is $1620.

Refer back to "sketchy" area, luckily my car gets the garage but one housemates car was broke into three weeks ago and they stole a GPS. Then earlier this week, two of my housemates cars get windows smashed and an iPod and pair of jeans are stolen.

I start looking around for better housing in a safer area and my old housemate offered me a spot in his Dad's house with him. The room is bigger, the area is a lot nicer and closer to where I'm working and rent is cheaper $500 and that's with utilities. I then got to thinking, well living with him would be like living with my parents but paying $500 so I got to thinking, maybe moving back home for a year, why? Because I want to buy a house.

I've tried to budget it all out and I've figured that if I do move back in with my parents, my disposable income goes from $1620 to $2120. Add into the factor that the $400 I have budget for food a month will also drop possibly $100-$200 or so due to living at home.

If I have $2100-$2300 of disposable income a month, I can then put $1100-$1200 a month into my "downpayment" account and still have $1000 of disposable income to spend when needed. Most likely I would only spend max of $300 and the rest can go into my downpayment account or save for a rainy day. That's $1800-$1900 a month going towards a house and being able to live comfortably. By the end of one year I will have $22,800 saved from that year, add the $27,000 I have in the account already and I'll have almost $50,000. At this time, depending on my job status and pay, I can decide if I'm ready to buy a house, or find a nice place to rent and save a little more until buying.

Now the thing that is holding me back from moving in is basically, what am I going to "give up" by living back with my parents? First and foremost is going to be bringing girls back to the house/spending the night. That is a big downer, but I guess I can stay at their place, and is probably better that way since I can leave whenever. Second dilemma is, how much personal space are they going to give me, will they be asking me what time I will be coming home, where I am going, etc etc. All things I can talk to them about before making a decision.

For those who have graduated, what did you guys decide to do and how did your situation workout?

All of the stuff you questioned in your last paragraph needs to be laid out on the table with your parents before you make your decision. Given the amount of income you are making right out of school and the way you have laid out your finances, moving back home and saving a years worth of money is exactly what I would do in your situation. But then again, everyone's situation is quite different...

I moved out 4 years ago when I was 20 and still in school. Moved into a farmhouse that sits on 6.5 acres, 500+ acres to 4wheel and hunt on and a river behind my house to fish, swim and conoe on. It's not the newest house (close to 100 years old), but I slapped some new paint on it last summer as well as the barns and have done some pathing up work here and there and, to me, it looks just fine. Rent..$200 + electric, gas, insurance and my personal utilities. Granted I am renting this house from a friend of my family, I still upkeep and maintain it as I am asked to do, no exceptions.

For me, I live in paradise and have no intentions of moving out until life asks me to. Until that occurs, I go to my full-time job during the week and work part-time at another place on the weekends and have been saving like the world is going to come to an end tomorrow, so that I have a head start on my IRA/funds/savings for the future and because I really want a newer 06/07 3/4ton Dodge, a-stat!

If I was in your situation, I'd move back home for a little bit until you couldn't stand it anymore. With your amount of income and financial outlook, you'd be saving a good amount of money. I know numerous people that graduated, found a decent job, bought a new car (along with everything else they wanted because of their "new job") and moved into a nice apartment after graduating, but they never have enough money to do anything because the word "save" to them is something they'll start doing later in life.

Everyone has their own perception of moving back home after school and such though. The only person to make that decision is you, how you feel about it, if you really care what others think and what you want in your life.

Is there a convenient way you can enter the house at night w/o bothering your parents? I don't live at home but when I visit I stay in the basement and just let myself in the basement door...although that might not fly anymore with the new long tubes and mufflers.

Props for saving up for a place of your own. I didn't want to pay rent so I got a house as soon as I could. Luckily I was able to stay with my aunt and uncle for 8 months while I looked and had a house built. It's a lot of money but I have 1-2 roommates paying me rent now so I can still have 'disposable' income for fun stuff.

^^^ Now that you said that, I totally forgot about our "guest" bedroom downstairs. It is basically a master bedroom downstairs with shower and bathroom and everything.

That is the only way for me to end the house at night without bothering them. I would keep the S4 parked outside, so I wouldn't open the garage door. I can enter through the door in my garage or through the front door and if they allow me to stay in the guest bedroom which I don't know if they will let me. If I have to stay in the room upstairs then I take the stairs up and the first room right when you get off the stairs is their room so I'd be walking past their room to go down the hallway to my room.

I could try and see if I could workout the guest bedroom, that would be great! Own bath/shower, big room.

As far as when I buy, I'd definitely buy at least a 2 bedroom house and then find a roommate to help out with the mortgage.

Well I think I'm going to end up moving in, the parents gave me the OK to live in the guest bedroom down stairs. Own bathroom, own shower, own floor (parents are on 2nd story) free rent, I don't think you can beat that.

One thing to remember, you will be living under their roof, so their rules apply. Otherwise, its a good way to save up some money, but just remember that you are living under their roof and sometimes its hard to remember not to take advantage of them just because they're your parents.

Quote: Originally Posted by TXGTOU... One thing to remember, you will be living under their roof, so their rules apply. Otherwise, its a good way to save up some money, but just remember that you are living under their roof and sometimes its hard to remember not to take advantage of them just because they're your parents.

+1. First, good for you being finacially responsible. It sounds like your parents are good people. I would consider setting aside a little of your income to pay them something, and an hour or so a week to help them out around the house. Sounds like it could be a win-win for everyone.

Yea I'm definitely going to be helping around the house and helping cover some costs here and there. They've taught me well as I've grown up and I respect and am thankful for the things they've done for me and I'll do anything to help take care of them and give back to them. It is a mutual respect between my parents and I, I am living under their roof and I respect their rules and clean up after myself but they also know that I am now 23 years old, and they cannot have a curfew on me or anything like that. Also, I will be working late hours, so I will rarely be at home during the weekday, only coming home to catch 6-7 hours of sleep hopefully.

If your parents are anything like mine, the 'house rules' won't be too big of an issue. I moved away at 18 for 5 years to go to college and work, so I was out of touch for a good period of time. Right before I joined the army, I moved back into my dad's house to help with the transition into the army. While there, it was more like I was a guest to be there because I'm sure they were just happy to have me around again. Though I was only there for a couple months before leaving, so if your there a year+, things might start to get a little different. (IE: 'since youve been living here a while, you should consider helping out with chores or some such)

You have an S4?

I did almost the exact same as you. After grad school, I moved home for year (well, 14 months) - I closed on my house 9/1. Its a great way to save money but what TX said is spot on.

Quote: Originally Posted by TXGTOU... One thing to remember, you will be living under their roof, so their rules apply. Otherwise, its a good way to save up some money, but just remember that you are living under their roof and sometimes its hard to remember not to take advantage of them just because they're your parents.

Help them out, do chores, bring in dinner some night, and treat them like their your parents. Just like HS, they'll want to know how your day was, etc.

I did the same thing as you when I graduated, moved home and saved money because I refused to pay rent like I did when I was in College. Paid off the car, saved up a nice down payment and close on my first place on the 23rd. If you have a good relationship with your parents and they have plenty of room I don't see a problem with it, it's the smart choice for those of us that live financially responsible. I have garage parking, plenty of space to go somewhere else (beats the hell out of a 1 bed room apartment), and rent/food are free. Go for it.

On a side note I do hope this is one of your last what should I do threads...

Tyler

I did it. After college I stayed at home until I got married. (~24)

Best decision I ever made.

It helped me save my money for my house/wedding/ring/etc...

Of course I did laundry, cut grass, cleaned/vacuumed, etc.

I must just be old-fashioned.

As I was raised, you MTFO at 18. Yeah, it was hard. Yeah, money was tight and you had to work to get by. But you were a smurfing man.

$37K a year and you don't know if you should be living on your own? Christ on a cracker - how is that even a question? O NOES GUISE! ONLY $1600 IN DISPOSABLE INCOMES! SHOULD I GET TEH WELFAREZ?

quit blowing money on cars and you'll be able to save up money for a house no matter where you live

Quote: Originally Posted by lukem80... quit blowing money on cars and you'll be able to save up money for a house no matter where you live

Right?

Quote: Originally Posted by Doric... I must just be old-fashioned. As I was raised, you MTFO at 18. Yeah, it was hard. Yeah, money was tight and you had to work to get by. But you were a smurfing man. $37K a year and you don't know if you should be living on your own? Christ on a cracker - how is that even a question? O NOES GUISE! ONLY $1600 IN DISPOSABLE INCOMES! SHOULD I GET TEH WELFAREZ?

Haha that is funny, but in his defense home ownership in CA is alot more expensive then home ownership in CO...

Quote: Originally Posted by lukem80... quit blowing money on cars and you'll be able to save up money for a house no matter where you live

That I do agree with mostly (Again CA, my aunt when her husband died sold her house and down graded to a nice trailer that costs more then a crap ton of money that would have bought a very nice house here in Texas). I bought my goat, paid it off and will mod it more when I have the ability and a second car. Paying it off and a house was first though! It's all priorities...

Tyler

Quote: Originally Posted by amxguy1970... Haha that is funny, but in his defense home ownership in CA is alot more expensive then home ownership in CO...

Wages are much higher as well.

Quote: Originally Posted by amxguy1970... On a side note I do hope this is one of your last what should I do threads... Tyler

Quote: Originally Posted by Doric... I must just be old-fashioned. As I was raised, you MTFO at 18. Yeah, it was hard. Yeah, money was tight and you had to work to get by. But you were a smurfing man. $37K a year and you don't know if you should be living on your own? Christ on a cracker - how is that even a question? O NOES GUISE! ONLY $1600 IN DISPOSABLE INCOMES! SHOULD I GET TEH WELFAREZ?

I gotta agree. You've got to live in the trenches after college. You'll learn a few life lessons and come out a stronger person.

When I have kids I'm going to be all about helping/nudging them along but if they have a solid job like the OP, they can fend for themselves or will learn to. That's not to say I'll let them sleep in a gutter, but you get the idea...

Question: Have you ever drank a beer with your dad?

If you haven't, now you can and should. When I moved back after college so I could save up to buy my house it was the best part of the experience.

Granted I tried and tried to not get a job near my parents, but fate seems to want me here.

Good luck and +1 to Barry and Tx's comments.

Here are my thoughts:

1. You should pay your parents some sort of agreed rent. You will cause their expenses to go up using more utilities and such, and paying them nothing is not fair.

2. If you are not already, you should maximize all your retirement benefits, 401K, Roth IRA... etc. This might change your numbers slightly for your savings rates. You will thank yourself in the future for doing this.

3. Get out of all debts. It is a guarantee of return on your money.

4. Decide if your career/current job is the one you want for the next few years. Decide what part of the country you want to live for the next few years. If you want to move in the next 5 years or less, or you don't think your current job will last that long or they might move you, don't buy a house. Renting is cheaper when you consider closing costs and commission on selling a house, unless you get something real cheap.

5. Having a good stash of cash and equivalents is good for things that life brings along. Maybe you find the right woman to spend the rest of your life with. The marriage process is not cheap, kids not either. Buying a house for yourself and buying a house for a family are two different things, so if you buy one now, you might be trading up for something different.

I lived with my parents teh first six months of my job. cash was easy to save. In fact, the reason i can survive now is due to that savings. Rules were hard on me. My mother is a control freak. but i was traveling for work so i was only home on weekends. Except i was expected to act like a 13 yr old and had a curfew of 11pm... (wtf mate.) I dont begruge helping them out in the yard though. Those are my best memories.

Save up and take them out to a nice dinner. Not outback, but some non-chain. Waiter pours the wine and wipes the bottle off type place. My dad was never happier than when he didnt have to pay and could feel proud that i was paying for my own way. Of course i took him to hooters and we consumed 60$ in beer...

Heck, go grocery shopping with your mother and quickdraw your card so you pay grocery's occasionally. they may fuss, but if your saving that much money. The least you could do is help out.

One of my dear friends told me to always have 6 months of salary saved. Liquid. Not in a 401k. This money is not for the newest turbo or awesome wheels. It is there for when you lose your job, get married, knock up doric, wreck a car and insurance denies you, etc.. max out all like said above. I put 18% into my 401k. I have 13k in there, after losing 20% in 2008... (my co matched heavily.) I made sure this 6 months was there before i bought the z. before i bought a ps3, etc...

oh and +1 on the sharing a brew with your dad. It really makes a whole world of difference if you can go on a guys night out and share the tab. Or buy a round for him. It just tastes better after a hard days work.

Quote: Originally Posted by tgto... 2. If you are not already, you should maximize all your retirement benefits, 401K, Roth IRA... etc. This might change your numbers slightly for your savings rates. You will thank yourself in the future for doing this. 3. Get out of all debts. It is a guarantee of return on your money.

Quote: Originally Posted by Son of Mad Dog... IOne of my dear friends told me to always have 6 months of salary saved. Liquid. Not in a 401k.

Kids fresh out of school always forget about this stuff. Excellent advice.

If your parents are anything like mine, they'd rather have you living at home and saving your money wisely (401k, non-401k investments, debt re-payments, etc), than tossing it down the drain paying rent in an unsavory neighborhood.

Thanks for all the advice guys.

As far as housing, California housing/cost of living is a lot more than most States I can assure you that. Salary is higher to help adjust for that, but not everyone is making decent money their first year out of college. If I were to buy right now, I could afford a 200k MAYBE a 300k house/mortgage but that is pushing it and in California, that buys you a mobile home lot. According to Santa Clara County Realtor Association, Average cost of housing in my area is $700,000 (2 bed, 1 bath) and average cost of renting is $1400 per month (1 bed, 1 bath).

As far as my parents go, I take them out to dinner and bought things for them when I was going through college. I worked three jobs during college to be financially independent from my parents and to show that they raised me well and right. I am very grateful for everything they have done for me, and is still doing for me (allowing me to move home in the guest bedroom). It was actually my parents that suggested that I moved home right after I graduated college because they didn't quite like the area I was moving into as well as it would have been a long commute for me to work.

As far as debt goes I have no debt (only thing I put on my credit card is gas) as I hate knowing that I "owe" money on something. If I buy something I always buy it with cash because I like having all my accounts showing current balance. I have no future obligations to pay.

I'm all about planning for my future so I can live a comfortable financial secure life as I grow older. I will max out my retirement funds as my company matches everything. Any other future tips would be great. I think there are very few (at least of my friends) who are already thinking about housing and retirement funds. And for the 6 months of liquid salary in the account, someone told me that in the past thread and is a goal I'm going to strive for as it's very good advice especially in our economy right now.