01Can I Cover My Bills?
Before you move out, you need to make sure that you can afford to live on your own. You should write down a monthly budget including the extra expenses that you will be taking on when you move out. Do not forget to include things like your utilities, transportation costs, food, and rent. Many people do not realize everything they need to budget for when they first move out. You should have a surplus in addition to your standard bills to leave you room to get out of debt and build an emergency fund. If you have been living and working at home, you may have been spending a larger portion of your salary on entertainment and other costs than you previously realized. Try living on your budget for the next two months before moving out, and putting the extra money into an emergency fund for your job. It will prepare you to make the transition more smoothly and let you know whether or not you can afford to move out.
02How Much Debt Do I Have?
It is also important to consider the amount of debt you currently have. If you find a job close to home, and you are getting along okay with your parents, you may want to stay at home so you can pay down your debt more quickly. For this to be a good option, you need to have a definite debt payment plan and be making sacrifices so that the majority of your money is going directly towards your debt. You should have a target set for move out; it may be paying off the majority or all of your debt. You should also discuss this option with your parents before you commit to it. It is important to remember that you are living with them as a result of their generosity. Many parents will be willing to have you stay as long as they know you are making real progress on paying down your debt. You may need to report your progress to them each month.
03Do I Have an Emergency Fund?
Before you move out you should have an emergency fund saved up and set aside. This does not need to be a full three to six-month emergency fund if you still have debt, and the relationship with your parents is currently strained. You should have between $1,000 and $2,000 set aside to cover financial emergencies like car repairs. You will need to save this up before you move out of the house. If you have a good job, you should be able to save it up in addition to your first and last month’s rent within the first month or two of getting your job.
04Do You Have Money for Your Deposits?
When you move out, you will need to have money saved for your first and last month’s rent, any deposit and rental application fee that you may have. Additionally, you should have extra money for deposits or hook up fees for any utilities such as electricity, water, and cable. You may also be taking responsibility for your car insurance for the first time. You will need to make sure you have enough money on hand to cover these bills as well before you move out. Otherwise, you are going to start out in the negative. You will need to set up a moving budget to cover the costs of truck rental.
05Make Sure You Get Renter's Insurance
Renter's insurance will protect your property if you are robbed or there is a fire. It is not that uncommon to be robbed and signing up can give you peace of mind and help you replace your stuff if it goes missing. Although this may seem like an unnecessary expense, it is usually very affordable and can save you a lot of money if you are ever robbed. The rates are based on where you live and how much you choose to insure.
06Consider Your Roommates Carefully
Roommates are a great way to save on rent. However, you need to choose your roommate situation carefully. Friends can quickly become enemies in difficult living situations. Additionally, you need to be sure to protect yourself against identity theft and be sure that you have your personal information in a place that it cannot be found or accessed. If possible, sign separate leases with the complex so that you are not held responsible if your roommates skip out on rent or other bills.
07Limit What You Spend on Furnishing Your First Apartment
When you first move out, you may end up furnishing your apartment with primarily second-hand items that you get from family or thrift stores. You can still create a great space and slowly add to your apartment as you save up money to buy the newer items that you want. It is something that you should do with cash only. Making the frugal choice now will help you to afford a nicer home in the future because it will help you to avoid debt. Take the time to hunt for deals. You can work on designing the home you want with careful planning and saving.
08Protect Your Credit Score
Many young adults ruin their credit when they first move out. Late payments and failure to pay your utilities on time or having them turned off can ding your credit. Be sure you pay all of your bills on time so that when you want to buy a house, your credit will help you qualify for a good loan. The habits you start when you first move out will follow you as you go throughout your adult life. Be sure to be responsible and pay your bills on time from day one, and you should be able to manage your finances effectively.
Are You Ready to Move Out?
If you moved back in after you graduated from college or if you stayed at home while attending school, you may be anxious and ready to move out on your own. It can be frustrating to live at home with your parents when you are no longer a teenager. However, if you move out before you are in a position to support yourself, you may end up hurting your credit and setting yourself up to live at home again. Ask yourself these questions before you move out.