Why it's time to leave mum and dad's pad

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A few years ago, people were talking about an "empty nest syndrome", as middle-aged parents were left in big houses they'd bought to accommodate themselves and their kids. But now those houses are filling up again.

"It's nothing like as big a problem in Australia as it is in Britain and Continental Europe, where massive youth unemployment has left Generation Y almost stranded, " said Mark Colvin, presenter on ABC radio program PM.

Yet the trend for young adults living at home with their parents in Australia is higher than it's been since the 1970s, he said, with around 23 percent still in their childhood bedrooms.

You may think it's a smart deal to stay in suburbia, but research suggests otherwise; according to a study by UBank, some 69 percent of Generation Y who work full-time but live at home are unable to keep track of their money.

Some are even saddled with a credit card debt.

So how can you get out of debt and out of your parents' home?

"If you have credit cards it's time to cut them up. Spending money you don't have on things that fall in value is the number one way to go broke," Barefoot Investors Scott Pape told Ten's The Project.

"Make a commitment to get yourself out of debt, even if it means taking extra shifts."

If you've got yourself into a credit card hole the number one way out is to pay the debt off faster, according to Michelle Hutchison, spokeswoman for RateCity.

"If you took a low-rate credit card – say 14 percent – and only repaid your debt at the monthly minimum of 2 percent, take a guess how long it would be before you were debt-free?" she said.

"A $1000 balance would take you over 13 years to clear, a $5000 balance nearly 30 years and a $10,000 balance a whopping 36 years."

The simple act of moving from 2 percent of balance repaid every month to 4 percent has a huge impact. On a $10,000 debt at 14 percent, paying 4 percent off every month will see you clear the debt in 13 years, as opposed to over 36 years if you were only paying 2 percent, she said.

"The other time-honoured way of dealing with a large credit card debt is via balance transfer credit card. These allow you to take the amount owning from one card, transfer it across to another card from a rival bank, and close the first one down," she said.

"In return for switching your business, you get a lower interest rate for a period of time – we tend to call it the honeymoon period – on the balance you actually transfer."

Once you've done that, get some savings, said Pape.

"And if you are living at home, make sure you pay your way. Many baby boomer parents are struggling towards a retirement they can't afford – having kids to cook, clean and look after makes that job harder," he said.

"While it sounds harsh, one of the best things parents can do is to make their kids fend for themselves, and learn from their mistakes. The truth is no amount of money can buy back the freedom you (should) have in your 20s."

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