“I’m broke as an ‘80s has-been right now.”
It is a rare breed of post-grad who emerges totally debt-free from four years of tuition, rent, grocery bills, spontaneous spring break trips, and a generous serving of nights out. In fact, if this is the case for you, I would love to meet you and be your personal one-woman applause track for the rest of time. For those of you who are moving back home for a cocktail of financial reasons such as, most centrally, not having to pay rent, money is likely the topic du jour any day of the week: how you’re spending, how you’re saving, how you’re contributing to the household financially, et cetera.
Debby Fowles, author of The Everything Personal Finance in Your 20s and 30s Book, reminds collegiettes that their stint back home coincides with the repayment of any loans taken out to pay for tuition. “The day after you graduate, your six-month grace period begins (some types of loans have different grace periods). Your first loan payment will be due approximately 30 to 45 days after the end of your grace period.” With this in mind, it’s more important than ever to have your financial situation in order to prepare for the road ahead to student debt freedom.
At the heart of it, you’re at home, at least to some extent, to save money. Depending on the agreement with your parents, this post-grad savings crash course might vary anywhere from free rent (but that’s it), to free rent, free groceries, free gas in the car, free shirt-you-saw-at-J.Crew-that-you-had-had-had-to-have.
It’s important to bear in mind, however, that none of these things are actually free. Someone is paying for everything that you don’t pay for—and that someone is your parental unit. Of course, they’re happy to have their daughter back home staying with them, and in the ways of loving moms and dads worldwide, they would probably argue that your presence is payback enough.
For Dylan, however, borrowing money from his parents is not something to be done scot-free. “I have friends who have no issues accepting money from their parents and subsequently spending it in one fell swoop, reigniting the vicious cycle of what I call ‘The Replenishable Mom and Dad Supplementary Trust’.”
Fowles encourages collegiettes to “review the status of your student loans to see if you’re taking advantage of all the benefits offered by lenders and if the plan you’re in still suits your changing financial situation. Just because the terms of your student loans include a particular repayment plan doesn’t mean you’re stuck with it; if it isn’t working for you, you can apply for a change.”
Beth knows that there are few discussions more important than the financial one after returning home to live with your parents. “This was an important discussion to have right away after moving home. I had a summer job and I wanted to contribute at home, too, so I was open about my earnings, how long I expected to be home, and how much was reasonable to contribute while leaving me enough money to have some independence—which included the money I used to travel for career job interviews. It was good for my parents and for me to know I had a time frame—and a budget—in mind for how long I’d be home; that I had an end goal.”
Are you going to contribute to the grocery bill? Will you chip in on gas in the car? If your parents ask you to pick something up at the store, will you pay with your own Visa or theirs? What is your budget? What is your saving plan? These are all significant questions to work out on your own and with your parents before moving back in.