Dave Ramsey has a blunt message for young adults who live with their parents. 3 things you need to do to get ahead (and get your own place)

More young adults are choosing to live at home with their parents — but many of them are using what they are saving on rent to splurge on designer handbags and expensive jewelry instead.

Morgan Stanley analysts say these young adults have more room in their budget for discretionary spending and are helping to drive a boom in the luxury goods industry.

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Personal finance author and radio host Dave Ramsey criticized the trend on The Ramsey Show, calling it “a trainwreck.”

“So, let me get this straight. You live in your momma’s basement, but you got a Coach purse,” Ramsey says. “Here’s what’s going to happen — you cannot avoid life, it’s coming for your butt. Momma can’t protect you.”

Whether you’re an adult living with your parents or you have kids who haven’t left the nest, these simple rules can help if the family home is starting to feel a little crowded.

Why are young adults still living at home?

Almost half of all young adults aged 18 to 29 are living with their parents — the highest level since 1940 — according to U.S. Census Bureau data.

Multigenerational living as been steadily increasing over the past five decades, although the economic repercussions of the COVID-19 pandemic put a spotlight on the trend, with many adults “boomeranging” back home.

While the hosts of The Ramsey Show claim these adult children are being “enabled” and “coddled”, many simply cannot afford to live on their own in the current economic climate.

Rising rents and high mortgage rates have made it much more difficult to move out. And high inflation is impacting everything from gas to groceries, while interest rate hikes are raising borrowing costs.

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The Morgan Stanley report also says that they may also be driven by other sociological factors, such as enrolling in higher education and getting married later in life.

What you should be doing with the extra cash

There are many practical benefits to living with your parents, but it’s important that you also use this time to work toward your goals, such as becoming financially independent.

“The problem is you’ve got debt, you’re not earning enough money and you’re not doing enough to go out and change it. Mom and dad can’t do this for you,” says The Ramsey Show co-host Jade Warshaw.

Here are three ways to focus on your financial health instead of splurging on luxury items.

1. Don’t buy now and pay later

The rise of buy now, pay later (BNPL) options at checkout have made it easier for younger consumers to purchase expensive luxury goods, notes Quartz. But if not used responsibly, the financing feature can drive shoppers deeper into debt.

If you don’t have enough money in the bank to presently fund a Prada purse, don’t rely on BNPL to help you cover the costs in installments. There are plenty of risks to look out for.

While some BNPL plans come with zero interest or late fees — making them a popular alternative to taking on credit card debt — the charges could start to add up if you miss a payment.

Consider working on a plan to clear your existing debt (instead of adding to it), like paying your bills in full and on time or consolidating multiple loans into one if they’re hard to keep track of.

Read more: Here’s how much money the average middle-class American household makes — how do you stack up?

2. Stop with the Shein hauls

While it can be tempting to indulge in cheap clothing, especially mimics of expensive brands, try not to get carried away.

Fast fashion retailers like Shein and Boohoo may offer cute $6 dresses that seem like a steal — but adding more unnecessary pieces to your wardrobe is both bad for the environment and your wallet.

You may have more room for discretionary spending, but your money could be better spent elsewhere, such as investing it in the stock market, even if it’s just a few dollars at a time.

3. Start saving now (so you can eventually move out)

While you’re saving on rent by living with your parents, make sure you’re actually putting aside some spare cash to eventually leave the nest.

If you are planning to buy instead of rent when you move out, experts generally recommend saving 20% of the home’s purchase price for the down payment, however this can be challenging for many first-timers, especially as home prices continue to rise.

You’ll also need to have the money to support your monthly mortgage payments, utilities and other essential day-to-day expenses. And don’t forget to put a little aside for emergencies so when your car breaks down or your pet gets sick, you don’t have to call mom and dad for help.

Dave Ramsey isn’t the only expert trying to make a point about getting your financial act together.

Personal finance icon Suze Orman recently passed on some sage saving wisdom during a recent chat with Moneywise.

“Listen, $10 is better than nothing. $50 is better than $10, $100 is better than $50. Because really, sometimes $200, $400 can make a world of difference in your situation.”

WATCH NOW: Suze Orman tells a cautionary tale on what happens when you can’t cover your next financial emergency

Do your research, determine how much home you can afford in your chosen location and create a saving plan that you can stick to.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.