Preparing to be financially independent from your parents
Leaving the nest is a simultaneously exciting and taxing experience. You finally get to enjoy full physical independence, but what about finances? How do you prepare yourself to be financially independent when all you’ve ever known is dependence? 25 percent of teens think that they won’t be able to support themselves by their mid-20’s . It’s time to take hold of your finances and become a part of that other 75 percent.
It may sound silly, but imagine yourself with full financial independence. For most people, this means cutting out the excess. Picture what your weekly schedule will look like without all of the unnecessary expenses. This may mean cutting out your monthly gym membership or taking a rain-check on the dinner date with your friends. It's not a fun task, but it's necessary to ensure that you aren't diving headfirst into something you may not be mentally ready for.
Write down a list of everything you pay for currently, such as gas or eating out. Next, write down everything your parents pay for. This often includes car insurance, the phone bill, and a car payment. Calculate how much extra income you would need to accommodate the additional expenses from your parents. Central Bank's Money Manager tool makes it easy for you to create personalized budget and savings goals, as well as track your progress, set alerts, and view all of your accounts in one place.
Consider getting a second job.
If your schedule allows, a second job could be very beneficial. This could cover any leftover expenses you've absorbed from your parents that you can't afford. If your first job equips you with enough money, working a second job could be used to create an emergency fund or savings for a future investment.
Set realistic goals.
This won't happen overnight! Setting goals for yourself will create a clearer picture in your mind of what you can accomplish. For example, you can start by ranking the expenses you are taking on from lowest amount to highest amount. Make a goal to take on one expense every month until you've taken them all.
Finally, learn from your parents.
They're the ones who helped you reach this point, after all. Are you worried about how to pay bills or balance your checkbook? Don't be afraid to ask your parents to sit down and watch the process! More than likely, your parents have been in your exact position and they know how you feel. Educating yourself on small tasks like these will make the process seem a little less arduous.
Financial freedom is an empowering process! It may not be easy, but it is so rewarding in the end.
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The information provided in these articles is intended for informational purposes only. It is not to be construed as the opinion of Central Bancompany, Inc., and/or its affiliates and does not imply endorsement or support of any of the mentioned information, products, services, or providers. All information presented is without any representation, guaranty, or warranty regarding the accuracy, relevance, or completeness of the information.