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With the cost of living in America rising in many parts of the country, young adults are faced with high rents.
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And with the additional burden of high student loan debt, many college graduates have to return home to live with their parents.
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Jen Hayes, author and founder of the site Frugal Millennial, shares her experience with dealing with high rents and living with her parents.
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Many recent college graduates choose to rent an apartment instead of buying a house because renting is believed to be cheaper. According to a GOBankingRates study that analyzed the average cost to rent a one-bedroom apartment in 50 major U.S. cities, rent is as high as a mortgage in some states. The most expensive areas to live are San Francisco and San Jose, Calif., with a median apartment rent of $3,400 and $2,455, respectively. Next on the list are New York City and Oakland, Calif.
New York and California are known for being exorbitantly expensive, but even some of the less popular areas of the U.S. are quite costly. Of the 50 areas analyzed, 30 have a median apartment rent of over $1,000 per month.
But paying this much for rent can be a major challenge for young adults who are struggling with student loans.
When I finished grad school, I had a grand total of $75,000 in student loan debt. I always knew I would have debt, but I also expected to earn a high income. I was in for a rude awakening. My first job after graduation was a temporary position that paid only $15 per hour. Meanwhile, my student loan payments were $816 each month.
My husband had $42,000 in student loans, which came with a $500 monthly payment. Our combined student loan payments were $1,316 — as high as a mortgage! We thought we would do all right financially once I found a better job, so we planned to live with my parents for a short time while I searched for a higher-paying job.
Related: Why the $1.5 Trillion Student Debt Crisis Hits Women Hardest
After I landed a job with a $10,000 salary increase, we decided to start looking for our own place. We were shocked when we realized how expensive apartments had become in the Minneapolis area. According to the GOBankingRates study, the median rent of a one-bedroom apartment is $1,550 per month in Minneapolis.
Paying $1,550 in apartment rent each month is comparable to paying a mortgage in a more affordable city. Our student loan payments were already as high as a mortgage. We were two 25-year-olds earning entry-level salaries. We couldn’t afford two mortgages.