So you want to move out? Imagine you have been living with your parents since college graduation and you miss the independence of living away from home. Maybe you are just looking to move from one apartment to another. Or, maybe your situation is a little different altogether. Whatever your situation is, you’re probably wondering, “How much money should I save before moving out?”
Adult independence starts with financial stability; don’t move out until you know that you can sustain yourself. You will need to pay rent, keep up with your bills, and have an emergency fund.
Prepare to Pay Rent, Fees, and a Deposit
As we mentioned, living on your own comes with financial responsibilities like paying rent, so be sure that these monthly payments fit into your budget. On top of rent, you may need to pay for utilities, transaction fees, and whatever else your landlord tacks onto your monthly payment. Finally, you’ll likely have to pay a security deposit upon moving in. This money acts as a safety net for your landlord to use in case of damages. If they don’t end up using the money, you can get it back when you move out.
Keep an Eye on Your Credit Score
Even before you move out, it is wise to check your credit score. This is something landlords will look into when considering you as a tenant. They want to know your rent-paying habits. If you regularly pay your rent the first day it is available, your credit score will be high. As you move out, keep up with your rent and utility payments to maintain a high credit score. Debts can also affect your credit score, so be sure to pay those off before moving into a new place.
Manage Other Living Expenses
You’ll have to keep track of many expenses, especially when living on your own. Bills, subscriptions, and renter’s insurance top our list, so keep these in your budget as you plan to move out. Consider having an emergency fund, too. This will help you keep up with living expenses even amid unexpected circumstances. If you want to make the most of your money, go one step further and consider keeping your emergency funds in a high-yield savings account; this will give your funds the chance to grow while you are not using them. It’s a win-win.
Consider Transportation
As you’re shopping for apartments to move into, remember location, location, location. What does your commute to work look like? If you drive, how much will you need to budget for gas each month? If you plan on taking the bus to work, how far away from your apartment is the local bus station?
Commit to a Year
Before you move out, make sure it is something you can commit to. Most leases last a full year, so settle on an apartment that you’re comfortable with. This means taking a good, long look at the place to identify any glaring problems before you move in.
How Much Money Should I Save Before Moving Out?
Save enough money for the rental deposit, a few months of rent, and other expenses like insurance and transportation. The cost of living is different depending on where you live. As you plan to move out, be sure your monthly income covers all of your monthly payments and living expenses with some money left over.
Ways to Cut Costs
Now that you have considered all the payments you’ll have to make, you can do a few things to cut costs. For example, think about moving into an apartment with roommates. Sharing the cost of rent with people you share common spaces with can make it much more affordable.
Another idea: If you move into an unfurnished apartment, you will likely need some furniture (unless you’re planning on sleeping on the floor and eating at a cardboard box). From mattresses to couches and everything in between, the cost of furniture can add up. Make these purchases affordable by buying secondhand furniture or shopping at IKEA. IKEA furniture is cheaper than competitors because they make you construct it yourself. If you’re okay with that, it can be a great option for adults just gaining their independence.