Moving out of your parental home for the first time can be incredibly exciting: It’s a major milestone in the process of adulting and becoming independent. You’ll likely be paying your own way, keeping your own hours, decorating it as you see fit, and having friends over often.
But despite this anticipation, the process of moving out can also be daunting. Living on one’s own is expensive. It has recently been especially pricey, thanks to inflation and a scarcity of housing. Add to that the fact that when we’re younger, we tend to have lower incomes, and it can be a tremendous financial challenge to afford living on your own.
That being said, with smart money management, it is indeed possible to afford to move out. To help you get a good plan in place and make your dream a reality, keep reading. You’ll learn:
• How to afford to move out, including the upfront costs
• How to know how much rent you can afford
• Tips for making moving out more affordable.
How to Financially Prepare to Live on Your Own
Upfront Costs and Regular Bills
Let’s say a friend clues you in on a great deal on an apartment rental and says to hurry and get an application in. Just a minute, please! Before you can move out, you need to make sure you can truly afford to do so.
Start your research by tallying up all upfront costs and regular bills you’ll need to pay such as rent, auto and renters insurance, utilities, cell phone, and groceries. After calculating all necessary expenses, see how much room is left in your budget for extras like dining out or traveling.
Also consider the one-time hits your finances will take when you head out on your own: There may be broker’s fees, moving expenses (more on that in a minute), and other charges, as well as the price of buying furniture and other items for your home.
By looking at your budget this way, you can get an idea of whether you can comfortably afford to move out or if you need to wait a little bit longer to make a move work financially. You want there to be some breathing room in your budget so you don’t wind up putting necessities on your credit card and racking up debt.
Steps to Afford Moving Out
Now that you have an overview of costs and expenses, it’s time to take the next step and drill down on understanding what you can afford, when you’re ready to move out, and how to navigate a move more easily.
These steps will help you get your own place without going broke.
1. Assessing How Much Rent You Can Afford
Are you asking yourself, How can I afford to move out? If so, you are likely most focused on how much rent you can pay. You’ll want to come up with a range of how much rent you can take on while still managing your other necessary bills, such as student loans, health insurance, and car payments.
Tally up all your expenses and subtract that from your monthly after-tax income to see how much room is left in your budget and if the amount you can afford to pay is doable in your area. If you’re feeling as if you can’t quite come up with the necessary rent, you may want to consider how to move to another state or a nearby city that’s more affordable.
2. Considering a Roommate Situation
If it’s too hard to afford rent all on your own, you can think about having a roommate to help share the expenses with. Not to mention, having a roommate can make moving out for the first time feel a lot less lonely.
3. Researching Homes and Locations
Speaking of rent: Whether you plan to rent or buy when you move out, you need to do some research on different housing opportunities in different areas. That way, you can see where you can get the most bang for your buck while still meeting your personal goals.
For instance, if you really value having a short commute, you might search for a studio instead of a one-bedroom apartment in the neighborhood you are targeting, if one-bedroom units are pricey. Or, if you are a young single person hoping to rent a house, see what kind of prices you find in a neighborhood that’s adjacent to the one you are targeting or choose to go farther afield. You might find better deals due to more housing supply. A relocation loan at a low interest rate could help make the transition more affordable, especially if you will be saving a good amount on your monthly costs.
Recommended: How to Buy a House Out of State
4. Researching the Cost of Movers
If you have a fair amount of things to move, it’s important to budget for the cost of movers. Yes, a friend with a van may be able to help with some smaller items, but things like a queen-size bed typically require movers.
Depending on how much you have to move and how far the move is (25 miles? 250?), your costs could be a few hundred or thousands. Get a couple of estimates from companies that come and actually eyeball how much you have.
This will help keep these common moving expenses down in a “no surprises” way. Also, be sure to find out whether moving materials are included; you might be charged for boxes, tape, and moving blankets. Inquire about “drive time” to and from your locations, which you may be billed for. Also remember that if you run out of steam and need help packing, it will cost you.
Recommended: The Ultimate Moving Checklist
5. Not Making Any Excuses
It’s easy to think, “I can’t afford to move out” or “Rentals are hopelessly expensive” and give up (or at least procrastinate for a good long time). But if there’s a will there’s a way. Finding your motivation and patience can be crucial to taking this step and getting your own place.
It’s common to get complacent when moving forward feels hard. If you do have to remain living with your parents or another family member while you save up to move out, keep your eye on the prize. Set up alerts for new home listings, put the word out that you are hunting for a home of your own, and keep saving and making career progress so you can attain your goal of moving out.
6. Having an Emergency Fund Saved Up
One way to lessen the financial stress of moving out is to have an emergency fund ready and waiting. That way, when you do move out on your own and hit an unexpected (and major) expense, you will have a financial cushion available to help you out.
How much to have in an emergency fund? Experts advise having three to six months’ worth of basic living expenses stashed away (a high-yield savings account can work well). Figure out what that amount would be with the housing costs you expect to pay, and begin saving. Even $25 or $100 a month is a good start to get that layer of protection going.
7. Tracking Your Spending
When you are considering moving out for the first time, it’s wise to track your spending for a month or two. This will give you an idea of how much you tend to pay out each month, which can help you get a better idea of how much rent you can afford. For instance, how much do you typically spend on gas? On your WiFi provider? On eating out? As you look at these costs, you may be better prepared to know your budget once you are also paying housing costs.
Looking at your outflow of cash can also help you stop spending money. For instance, you might realize you are spending over $100 a month on coffees to go.
8. Budgeting for Home Needs
Figuring out how to move out with low income can be tricky. One hidden expense that is easy to forget about when budgeting for a move is home needs. Cleaning supplies, laundry, furniture, and appliances are expenses mom or dad may have taken care of in the past. Soon, they will be your responsibility. Consider how much that will cost and budget for it.
Also, if you are planning to buy a home instead of rent, budget for home maintenance and repairs.
9. Planning for Unknown or Surprise Expenses
Speaking of expenses that can be hard to plan for like home repairs, it’s important to leave some buffer room in a budget for surprise expenses such as car repairs or medical bills. This is where that emergency fund can really come in handy.
People renting for the first time often allocate a large percentage of their income to housing. This means your budget doesn’t have much wiggle room and an unplanned expense can really send shock waves through your cash management. Being prepared is an excellent line of defense.
10. Looking for Cheaper Options on Furniture
When you are first starting out, you don’t need to splurge on expensive furniture. Thrift stores, garage sales, and inexpensive retailers can all get the job done. Freecycle and other similar sites (or Facebook and Nextdoor groups) can yield furnishings, too.
Over time, it’s likely to become easier to swap those inexpensive finds out for higher quality pieces of furniture.
11. Managing Your Finances
To make moving out possible financially, keep a close eye on the money coming in and out each month. Take some time to get all finances in order and to create a budget for this new chapter. Learning to manage money is a big step towards independence. It will have you that much more prepared for on-my-own living.
12. Setting a Moving Timeline
Once it’s clear that a move is affordable, create a final timeline for finding a place to rent or buy and then moving in. Block out weekends for home hunting, and note how long before your move you want to get quotes from moving companies.
If you still need to save a bit more money, you can extend this timeline to include saving for a few months.
13. Being Realistic
It can take time to build the life you dream of, so don’t sweat it if your first home isn’t all that glamorous. Part of the fun of life is figuring things out and evolving over time. Many people have had first apartments that they still fondly look back on, despite how tiny, dark, or inconveniently located they may have been.
The best things in life often take time to fall into place, so be patient as you pursue your financial and lifestyle goals.
Banking With SoFi
Moving out can be expensive, but with a little bit of planning and budgeting (and maybe sharing the costs with a friendly roommate), it can be doable. Need help getting your finances in order in time for a big move? SoFi Checking and Savings is here to help. With our online bank account, you can organize your money, set savings goals, and save your change with Vaults and Roundups. As an added bonus, you can also access your payday (with eligible direct deposits) up to two days earlier and earn a competitive APY.
How much money should you have saved before moving out?
Figuring out how to move out with lower income varies by person to person. How much money someone needs to move out depends on covering the housing expenses they will pay and other expenses without going into debt. There are also expenses involved such as moving itself and buying new furniture. It can be a good idea to create an emergency fund to cover a few months of expenses before moving out.
How do you move out when you can’t afford it?
It’s important for your financial health to not move out until you can afford it. Planning and budgeting will be part of the process. If you still feel you can’t afford to move out, look into sharing expenses with a roommate or perhaps taking on a side hustle to earn extra income.
How do I know if I’m ready to move out?
You can get an idea of whether or not you’re ready to move out by calculating how much it will cost to live on your own. If you can afford to pay rent and other necessities and have some emergency fund savings, then you may be ready.
Photo credit: iStock/Hache
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