We get it, 2017 is the year where you're going to do all the things you've been saying you're going to do in the past. You're going to knock off that weight, get a new job, start saving more money, and yep, finally move out of your parents' house.
It can be overwhelming, trying to save and figure out all the financial stuff that comes with moving, when you're trying to pay off student loans, make your car payment, and take care of other responsibilities. Now you have to add rent? Wait, hold up. How can I afford this?
Here are some tips to help you put aside money for your move, as well as tips for how to manage it once you're out.
1. Research the cost of rent in your area.
The first thing you need to do when looking for a place to move to, is to see what the cost of living is. Is rent super high where you live, or where you plan to move? Does your salary allow for you to afford this? If you're making $2,000 a month, but rent is a good $1,200, you're stretching it a bit.
A good rule of thumb? Don't spend more than 30 percent of your take-home income, after taxes, on rent. Meaning, if you take home (after taxes) $2,000 per month, you should not be looking to spend more than $600 each month on rent. The idea here is that if you spend less on the place you live, you'll have more money to work with when it comes to other things, like health expenses, a gym membership, and groceries. You don't want to spend all your money on a nice place to live and then have to eat Ramen all the time.
2. Add 30 percent to that rent price.
Once you have your base rent price, factor in another 30 percent of that cost, and that will give you a better image of your living expenses, including utilities, food, property insurance, and other little aspects of living on our own that we might be tempted to overlook. We don't see it right now because these might be things your parents are paying for as of now. BUT THEY ARE ALIVE AND WELL.
3. Learn how to create a personal budget.
One of the best tips for someone looking to live on their own is to practice having a personal budget. You can choose a software, like You Need A Budget, or you can make a chart by yourself on Microsoft Excel or Google Sheets. These forms are created so that when you input information, like your savings, income, and expenses, you'll get to see just how much of each you can really afford. Some programs even let you link your bank and credit card accounts, so you can see what debt you owe and how much you have to spend on different categories, like clothes, going out, and groceries.
4. Pay off or pay down your loans.
When you go to look for a place to live, you don't want to be burdened by loans and debt. You want to be able to pay your monthly rent, and still have some "breathing room," when it comes to the rest of your money, that you can use for personal things you might need, better quality (or healthier) food, and saving. Try and pay down loans or get rid of them completely before moving out.
5. Be sure to have good credit.
When you go to move into a new apartment, the landlord will most likely run a credit check, which tells them how much they can trust that you will pay the rent. This number that they see is called a credit score, or FICO score, and it is dependent on your credit history—if you pay your bills on time, how much debt you owe on cards, and other elements. Try upping your credit score before trying to find a place so you can score a better apartment.
6. Start the habits while still at home.
Moving out is a big move, and it's going to shift your lifestyle quite a bit. It's going to teach you a lot of responsibility and discipline when it comes to your finances, because if you spend your rent money partying, you're sh*t out of luck. You will learn to budget and take on side jobs if you need to pay the bills. Practice budgeting and saving while you're still at home so it's not such a shock when you transition to living on your own.
7. Save, save, and save.
The best tip we can give you? SAVE. Every time you get a paycheck, put some away. This is known as a "rainy day fund," which is the money you use when you need cash after a medical emergency, unexpected event, or if you lose your job and need to, well, live. It's always best to try and save something, and not live paycheck to paycheck. Your future self will thank you.
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