Living at Home - Does it Save Money?
When I got my ducks in a row and decided to head back to school, I did the math, and figured that I could really only go back to school if I commuted from home. Otherwise, I wouldn’t be able to afford it. But those calculations were really just guesses - I had no idea whether it would really save me money or not.
More than one year later, the question is: was I right?
The Costs of Commuting
Even though I saved money on rent by living with my parents, I incurred the extra cost of commuting 16 miles to campus. This includes the cost of gas, the nearly $800 in repairs that my car needed during the school year, insurance, and little things like oil changes, inspections, and new windshield wipers. I did manage to keep the cost somewhat low by crashing on friends’ couches now and then.
Car costs and miscellaneous from living at home: $2,177 for the 2007-2008 school year.
The Costs of Living On Campus
If I’d lived on campus, I would have probably lived in same apartment there that I’d been living in, in 2006. The rent for that apartment was $3,060 for the 2007-2008 school year.
So already, rent vs. cost of commuting, I’ve saved money. But it keeps going.
Food! I guesstimated groceries at $120 per month, based on what I was spending when I lived in the apartment before. That’s another $960 for the school year.
And, even if I’d lived on campus, I still would have had my car. I have no way of knowing whether or not my car would have still needed all those repairs if I’d lived on campus, so I included them as a cost as well. I assumed about $25 a month in gas - I didn’t drive much when I was living on campus, but I did go to the grocery store and such. Car costs add $1,692 to the cost for the year.
Total costs for living in an on-campus apartment: $5,712 for the 2007-2008 school year.
Total Savings
$3,535
Case closed - I was right in the first place. Commuting saved me a boatload. In fact, the saving are even better than that: that extra $3,535 would have come from student loans, so I would have had to pay interest on that, as well.
One final note: although commuting can save a lot of money, I don’t necessarily recommend it for incoming freshman. Living on campus, on your own, is an experience that you can’t really put a price on, even with all this math. I moved back home because I absolutely had to.
If you can’t afford to live on campus, I would recommend picking a cheaper school before I would recommend moving home. That, unfortunately, was not an option for me.
Related posts:
This is nitpicky, but a truly fair analysis would try to assess the impact that your being at home has on your parent’s financials. I mean, there is no such thing as a free lunch. I am certain the cost is low compared to being at school, but you are using up food and utilities.
Comment by Brandon — October 13, 2008 @ 8:13 am
I wouldn’t say that you’ve saved any money, I’d just say your parents are paying for your housing and food.
Comment by Bonnie — October 13, 2008 @ 9:17 am
@Brandon and Bonnie:
I probably should have mentioned this, but my parents calculated the extra cost of having me at home (which was very low, since I spent many, many, MANY 14-16 hour days on campus, and then would sleep on friends’ couches), and added into the amount they charged me for car insurance. I’m on their car insurance plan, they pay the bill and I pay my portion, plus “rent” to them.
I downplayed this a bit because, well, it makes me seem like a hobo.
Comment by Stephanie — October 13, 2008 @ 11:00 am
Look up Citi’s Driver Edge card. Pays for any services done on your car (including oil change) on a single car registered to the card for up to 5000$. Saves more money per year
Comment by Chris — October 13, 2008 @ 3:06 pm
If you live on campus you can save money by not having a car - depending on where you go to school this can more or less feasible.
Comment by Phillip — October 13, 2008 @ 6:26 pm
@Chris - my boyfriend actually has this card. I don’t because I couldn’t pass Citibank’s verification process.
@Phillip - on some campuses, yes, this could work. However, if you look at my numbers, it wouldn’t have saved me money vs. living at home. The rent alone for living on campus was nearly $1000 more than all the money I spent living at home. And that was the second cheapest apartment complex on campus, and didn’t include food costs!
Comment by Stephanie — October 13, 2008 @ 8:33 pm
My daughter is a freshman living on campus at one of the most reasonably priced 4-year Ohio state schools. While tuition is currently “frozen,” fees are not. They hit you hard for things like communications and food. Example: for each quaerter, communications (phone line) is $130 (not including any long distance calls, which are extra) and the required food plan if you live on campus takes a$120 fee (for remodeling the Student Union) leaving the student with $735 for the 11-week quarter. The card is a “declining” balance like a debit card and the students are charged per item, with no drink refills. Alarmed when I found out about this, with visions of “dinner’s on me!,” I found out that the average meal is between $8-10—-and I was informed that the student would most likely need an infusion of money to get them through the quarter. If I do not add more money, my duaghter can expect to eat an average of 10 meals a week–maybe. Living at home by far is the most economical for sure. My (rhetorical) question is: Would it be better to live at home, cut your costs and be able to move OUT when you graduate—or—be saddled with so much debt at graduation that you must move back IN for several years when you are arguably at a more adult age? And like you said, not everyone has that option, but having your eyes wide open prevents total sticker shock. My daqughter, like most college kids are not thinking about future debt, just immediate fun!
Comment by Sue — October 14, 2008 @ 6:46 am
I totally agree. My school requires you to live on campus the first two years, and strongly encourages the other two. I ended up off campus the second semester of my senior year, but MAN it was a hassle to get out of the RESLIFE contract…
They don’t want you moving off campus because they make a ton of money on your rent there. At my school (where the dorms are not NEARLY as nice as yours, trust me - I’ve seen both) the rates were something like $800/mo not including mandatory meal plan purchases - and for the same $800 we could get a full sized apartment. Living off campus, but close (ideally walkable), is a GREAT idea.
Comment by L@spillingbuckets — October 14, 2008 @ 12:10 pm
[...] Living at Home - Does It Save Money? at Poorer Than You [...]
Pingback by It Feels Like Fall Roundup — Broke Grad Student — October 21, 2008 @ 7:01 am
An excellent case study for my Economics class on the topic of marginal cost and marginal benefit. I wonder how many of college students do think brilliantly and wisely as you do? May your tribe increase.
Comment by Sunny — October 29, 2008 @ 9:54 am
When I was on my college days, I made a plan and list of what are those things that I will be needing for my studies and what are the other expenses. I look at my travel expense first and noted what will be the total cost for one week and a month. I also included my food expenses and other materials used for my studies. And I budgeted it well until I graduated. Well organized planning will really help you with your budgeting.
Comment by Cassandra — November 10, 2008 @ 12:34 am
Yeah your right, you save money from all your expenses.but the point is living in an apartment makes you an independent person and a practice for you to live on your own.
Comment by Ponies — November 21, 2008 @ 1:51 am
Sounds identical to my situation. I’m paying insurance, food and stuff. So far, I’ve saved a couple of k as well.
Comment by Shaun Connell — December 3, 2008 @ 7:53 pm