MOVING OUT? READ THIS FIRST
The thought of moving out on your own for the first time can be exciting. There are so many choices and so much freedom! But, with all those decisions to make, it can be easy for you to overspend.
Let’s dig in on creating a budget that will help you with the leap to independent living.
Pick your budgeting tool
The idea of budgeting can leave some people cold, but it’s a simple process. The first step is to pick a tool that will keep you organized. There are a ton of budgeting apps, so find one that makes you comfortable. It will connect to your bank and do a lot of the legwork for you.
Or you can go basic and keep a simple spreadsheet. The trick on all these is to keep it in a place you can easily find and review it at least once a week.
No matter the tool you choose, you’ll want to include the following items in your budget.
Rent
You’ll probably rent for a while when starting on your own. The basic rule of thumb here is that your rent shouldn’t be more than 25% of your total monthly income. The trap many first-time renters fall into is paying for amenities and perks they don’t need. Focus on safety first. If you aren’t working from home, try to get close to work to save on commuting costs.
Utilities and Internet
Do a little research at each place you’re considering. Often, apartment managers and landlords can provide you with the average electricity, water, trash collection, and gas cost. Check to see which utilities they cover, if any.
Internet isn’t an option anymore. It’s become as necessary as any other utility. Determine what you need in terms of speed and reliability and stick with a straight internet plan instead of an internet/TV bundle.
Renter’s insurance
The average cost of renter’s insurance, according to Policy Genius, is just $15 a month. If you have to replace expensive items that might get damaged in a fire or lost in theft, that’s a small price to pay.
Cookware
It’s no secret that eating out will expand your waistline and shrink your checking account. So it may be worthwhile to invest in cookware. Even if you are learning your way around the stove, a good set of pots and pans will make cooking more enjoyable.
One more cost-saving tip for you: try to avoid the middle aisles of the grocery store. That’s where the processed, expensive (and fattening) foods are.
Hidden costs
If you are moving to a large city, public transportation may be more practical than a car. But it still costs money, so take some time to research those prices.
If you use a car, be sure to research parking costs where you live or work. Renting a parking spot can cost a few hundred dollars a month in some large cities.
These are just a few things to consider when creating a moving budget. As you get comfortable being on your own, check out a few more resources below that can help you keep control of your finances.
Enjoy your new independence!