How to Put Your Finances First as an Adult Living With Your Parents

How to Put Your Finances First as an Adult Living With Your Parents

Written by Lisa Rennie
Fact-checked by Caitlin Wood
Last Updated November 29, 2021

Buying a house and even renting an apartment can be super expensive these days, especially if you live in certain cities in Canada. Take Toronto, for example, where the average home price is a whopping $824,336, and rent is still pretty steep at $2,550 for a 2-bedroom unit.

With prices like these, it’s no wonder that more and more adults are living with their parents a lot longer than they did decades ago. Not to mention the countless students who are bogged down by ever-increasing college and university tuition over the past few years. These days, young adults are loaded with debt and can’t afford the housing and even rental prices that they’re faced with (click here for a comparison of rent vs. buying).

According to the National Association of Home Builders, the share of young adults living with their parents or other relatives increased to 26.3% in 2016 from 15.3% in 2000.

But are you doomed to live in your parents’ basement forever? Not necessarily.

If you start to develop healthy and positive financial habits today, there’s no reason why you can’t be on your own at some point in the near future. Here are a few habits to pick up that can help you do just that.

Do you know what the hidden costs of buying a house are? Learn here.

Get a Job

Sounds like a no-brainer right? Well, you’d be surprised at how many young adults slack off in this department. If you’re ever going to fly the coop and start living life on your own, you have to establish a career sooner rather than later.

A lot of millennials who have a degree or college diploma may be holding out for that awesome job that pays well. But in the meantime, they’re stuck at home waiting for the phone to ring. While you’re out there pounding the pavement for a good job, take some sort of income-generating gig to help you bring in some money.

You might even want to consider freelancing your services on places like Upwork to make a few bucks here and there. People actually make a pretty decent living off sites like these. Either way, getting a job – whether part-time, full-time or even casual – is your first step to financial independence.

Cost of Buying a House in CanadaCheck out this infographic to learn about the cost of buying a house in your city.

Pay Down Your Debt

Whether you have student debt, credit card debt, or any other type of debt, it’s important to pay it off as soon as you can. Be very diligent about outstanding debt, and don’t just leave it to fester and compound in interest.

Personal debt is a huge deal with young adults, particularly those who have recently graduated from college or university. Debt can definitely be the main factor that holds young adults down and prevents them from having the finances to be able to support themselves outside of their parents’ homes.

Interested in what your debt relief options are? Read this.

In addition to getting yourself some work, paying down your debt is another important task to take on right away. Come up with a plan of attack to get your loans paid off as quickly as possible. And if you have a few types of debt, figure out which one has the highest interest rate and consider paying that one down first.

Invest Your Money

It’s super important to commit your income to pay down your debt, as we’ve already mentioned. But if at all possible, try to save a portion of your income to investing for your future. The sooner you start investing, the faster your money can grow and start to work for you. This is especially important when you consider the prospect of buying a home or even retiring.

A safe way to start investing would be to contribute to an RRSP or open up a mutual funds account where you can make interest on money deposited but won’t expose your funds to the risk that is more typical of other investment channels like the stock market.

Save For a Rainy Day

Building up an emergency fund to fall back on is a great cushion to have. Once you’re out on your own, you certainly don’t want to be living paycheck to paycheck.

Before you make that big move, you want to have at least three to six months’ worth of expenses to fall back on in case you lose your job, you’re injured, you lose your apartment, and so forth. Just make sure that wherever you keep this emergency fund, it can be easily accessed right away.

How to start saving when you’re in debt. Click here.

Start Paying Rent

Your parents might be generous enough to allow you to continue living at home without having to financially contribute to household expenses. But even if you’re in this position, you may want to start getting into the habit of paying rent before the real deal happens.

By getting accustomed to having a certain portion of your income being dedicated to paying rent, having to pay an actual rent or mortgage will come more naturally. While you’re at it, consider pitching in for utilities and go out and physically pick up groceries too. These are all tasks you’ll have to do when you’re on your own, and the sooner you get accustomed to such chores, the easier it will be when you’re on your own.

Canadian Credit ScoreFor more information about your credit score, take a look at this infographic.

Start Building Credit

It’s likely that you have no credit if you’ve never had a loan. Or it may even be possible that your credit is not where it should be if you’ve taken out a credit card or two and didn’t use it responsibly. No matter what position you happen to be in, you’ll want to take steps to either build credit or repair it so that when the time comes to rent an apartment or apply for a mortgage, you’ll have no trouble getting approved.

Apply for a secured credit card and make sure to make your payments on time and in full each month. Doing so on a regular basis can help establish good credit, which will open the doors to plenty of financial tools and products that you may not be able to access if your credit score was lacking.

Need Help Choosing a Financial Product to Help You Build Credit?

Many young adults still living at home have an issue with having either no credit or poor credit as a result of bad spending habits. But with the right financial tools and the appropriate spending habits, you can build good credit that will put you in a better position to make it out on your own. Get in touch with Loans Canada today to help you choose the right financial product for you.

Lisa has been working as a writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same. She's used a variety of financial tools over the years and is currently growing her money with Wealthsimple, while stashing some capital in a liquid high-interest savings account so that she always has a financial cushion to fall back on. She's also been avidly using her Aeroplan TD credit card to collect as many Aeroplan points as possible to put towards her travels!

Click on the star to rate it!

How useful was this post?

Research & Compare

Canada's Loan Comparison Platform

Largest Lender Network In Canada

Save time and money with Loans Canada. Research and compare lenders before you apply. Share your experiences with Canada's top lenders.

Make Smarter Borrowing Decisions

Whether you have good credit or poor credit, building financial awareness is the best way to save. Find tips, guides and tools to make better financial decisions.

Save With Loans Canada

Special Offers

Earn An Extra 15% Cash Back

Earn An Extra 15% Cash Back
HOT!

Apply for a Tangerine credit card by December 31, 2021, and earn an extra 15% back (up to $150).*

View Offer
Build Credit With Refresh Financial

Build Credit With Refresh Financial
Popular

Build credit while spending money with the Refresh Financial VISA card.

View Offer
Build Credit For $7/Month

Build Credit For $7/Month
Popular

With KOHO’s prepaid VISA card you can build a better credit score for just $7/month.

View Offer
Industry Spotlight

What's happening with Canada's credit industry?

goPeer — Helping Consumers Achieve Financial Freedom by Connecting Canadians Looking For Financing With Canadians Looking to Invest

goPeer — Helping Consumers Achieve Financial Freedom by Connecting Canadians Looking For Financing With Canadians Looking to Invest

goPeer is Canada's first consumer peer to peer lending platform and connects creditworthy Canadians looking for a loan with everyday Canadians looking...

Read Post
Locator
Find The Best Rate
In Your Region
OR
Best Personal Loan Provider by Greedy Rates
Icon

Confidential & risk-free

All consultations and conversations with Loans Canada and its partners are confidential and risk-free. Speak with a trusted specialist today and see how we can help you achieve your financial goals faster. Loans Canada and its partners will never ask you for an upfront fee, deposit or insurance payments on a loan. Loans Canada is not a mortgage broker and does not arrange mortgage loans or any other type of financial service.

When you apply for a Loans Canada service, our website simply refers your request to qualified third party providers who can assist you with your search. Loans Canada may receive compensation from the offers shown on its website.

Only provide your information to trusted sources and be aware of online phishing scams and the risks associated with them, including identity theft and financial loss. Nothing on this website constitutes professional and/or financial advice.

Your data is protected and your connection is encrypted.

Loans Canada Services Are 100% Free. Disclaimer

Keep Track Of Your Credit Score

Subscribe with Credit Verify to monitor your credit rating and get your free credit score.