Living with parents can fast-track your bank balance — as long as they pay for rent and food

If you’re sick of renting, moving in with family could be the ticket to home ownership, with new research showing how much money you can put away.

House sharing with mates is infinitely more fun but living with your parents can save you a whopping amount of money.

But you have to be willing to bunk in with your folks for five years to make a big difference to your bank balance.

Finder research found the financial difference between those who live at home and those whose rent adds up to more than $106,000 over a five-year period.

It found the average cost of living out of home was $402, with $214 for rent, $42 for bills, and $144 for groceries and alcohol.

While that might not sound like much, it quickly adds up to $20,921 per renter each year.

Plus, there’s also $950 Aussies throw away on one-off items like furniture, appliances, and kitchenware.

But there’s a catch – you need to live rent-free, have your parents fork out for the bills and put $402 into a savings account.

The savings you make from living at home could bring you much closer to owning your own place. Source: Supplied

Living at home can put young people on the fast track to purchasing their first property, but only if they are smart with their money, said Finder money expert Sarah Megginson.

“A few extra years at home can add thousands to a person’s savings. The power of compound interest means those fortunate to live a couple more years rent-free will be the first to enter the property market,” she said.

“The key to making this work is having a clear savings plan; often people ‘move home’ to save money and 12 months later, they’ve hardly saved anything because they’ve kept up poor spending habits.”

Last year, a Finder survey found one in four households had adult kids over the age of 21 living with their parents. In 21 per cent of these households, adult kids had moved back in as a result of the pandemic.

It also found that 44 per cent of parents with adult kids help them out financially.

“Living out of home is a costly feat for young people – add in a global pandemic and economic recession and it’s not surprising many have found themselves unable to afford to continue to rent,” she said.

Could you live with your parents for five years to own your own home? Picture: iStock.

For those with a decent amount of savings already, crashing with the oldies could give them an even bigger windfall.

The average Gen Z or Millennial, who has $18,442 in savings, and puts away an additional $876 each month could build their wealth to a total of $177,983 over five years, the research found.

But if living at home isn’t an option, Ms Megginson suggests creating a budget strategy to meet your deposit goal.

“Set yourself a time frame for buying a home, then work out how much you need to save each month to meet your target,” she said.

“Consider moving to a cheaper suburb or downsizing to a smaller place. Even a small difference in your weekly rent could save you thousands of dollars a year.”