Moving out of the family home can be an exciting yet daunting prospect for many young people, not only because it's the first time that most will have had to look after themselves, but also for the financial implications of making it on their own. In fact, research has revealed just how much independence can cost, which could make it even harder for many to comfortably fly the nest.
According to research from Furniture123.co.uk, one in three respondents didn't leave the family home until they were 26, and when you consider the costs involved, it isn't hard to see why. Once you add up the cost of things like furniture, home accessories and the (often expensive) deposit and upfront fees – something that 67% consider to be the biggest financial burden – the typical nest-flyer will need an average of £6,397 to make it on their own.
This total is made up of the deposit and typical upfront fees (which add up to an average of £2,440), furnishings (£2,260), appliances (£980), bills (£550) and food (£167), so moving away from home can be an incredibly expensive endeavour. It's perhaps unsurprising, then, that 78% of those who still live with their parents cite a lack of savings as the main reason for not having yet made the leap to independent living, while 9% have no intention of moving out – despite being asked to.
"Young adults hoping to flee the nest face a number of financial challenges, such as the cost of living vs. average starting wage in the UK, rising house prices and the cost of rent, and that's before any bills are factored in," said Mark Kelly, marketing manager at Furniture123.co.uk. "There are ways that costs can be reduced, however, such as moving in with friends and sharing the costs, or shopping around to ensure value for money when it comes to buying furniture and appliances."
Shopping around isn't just for things like appliances, though – what about your bills? If you're in charge of arranging the electricity in your rented accommodation, for example, make sure to compare tariffs so you can be confident in finding the right deal. The same applies for TV and broadband packages, and you'll always want to keep your car insurance policy as low as possible so you've got more money to spend on your new home.
However, some people unfortunately find that the financial pressures of independent living can be too much, and many end up turning to credit to make ends meet. While this can be a good short-term solution for those who are truly in control, there's the chance that it could lead to a cycle of debt, and this has led to the number of young people with debt problems soaring in the last year.
Citizens Advice said that the number of people aged 17-24 who approached the charity with debt problems has risen by 21% in the last year, which comes alongside figures that show young people have an average unsecured debt of £12,215, more than three times the level seen during pre-financial crisis times (£3,988).
Much of this increase has been driven by student loans, but it seems that formal loans – such as unsecured personal loans – have their part to play, too. The average loan size has also increased, up from £969 to £4,577 over the same period, so it's little wonder that debt issues are rising.
If you want to enjoy the feeling of independence without the financial pressure weighing you down, make sure that you're prepared – and stay away from credit as much as you can! Student loans aside, turning to credit cards or personal loans when you're already in financial difficulty is a recipe for disaster, so always make sure you've got suitable savings stashed away before you take the plunge and head out into the big wide world.
You'll need to make sure you can stick to a strict budget, too, as you won't have your parents around to pay for things like food or bills – make sure you know exactly how much you've got coming in and the essential payments that are going out, and plan around it accordingly. Take advantage of things like vouchers and discount codes, and you may like to take a look at cashback sites and see what all the fuss is about – TopCashback says that the average member saves £356 a year by shopping through the site, so it could definitely pay!
Above all, stay sensible and make sure you're absolutely ready for life away from the parental nest, and then you can enjoy independent living without needing to worry too much about the financial implications.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
Moneyfacts.co.uk will, like most other websites, place cookies onto your computer’s
hard drive. This includes tracking cookies.