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Moving Out for the First Time: Budget Guide

Have you decided to move out of your parents’ house and begin a new life on your own? Then, you’ve surely realized that the most important issue is creating a moving out for the first time budget. Not only do you have to think about paying the rent and furnishing the apartment, but you also face a number of side expenses, such as relocation expenses, bills, etc. For someone who was nestled in the comfort of parents’ home, this is a huge challenge. But, we all need to leave the nest and spread our wings at one point. Hopefully, this guide will help you with the first and crucial part of this process –  setting up your budget.

Moving Out for the First Time: Budget Guide

Moving Out for the First Time Budget Checklist

You can start by deducting all potential expenses from your salary or income. Deduct not only the regular cost of living but also additional ones associated with relocation, deposits, insurance, and other fees. And don’t forget to create an emergency fund. Then write down all the expenses and do some math. As you will figure out, you will probably have to cut down on your expenses, starting from entertainment.

To anticipate your basic expenses, you need to take into consideration the following things: 

  • the rent and deposit for your new home (if required)
  • costs of relocation
  • Basic utilities: electricity, water, gas, cable
  • moving insurance
  • phone and internet bills
  • groceries and toiletries
  • any credit you may have taken 

You can inquire with your landlord or utility companies about the costs and fees you will be faced with in your future place.

Moving Out for the First Time Budget Checklist Put Your Finances in Order

Costs of Moving

Relocation can cost more or less depending on the kind of service you are paying for and whether you are doing the majority of packing yourself. But you still need to buy packing supplies, calculate gasoline costs, meals and expenses upon arriving at your new home, etc. To get an idea of the relocation prices, it’s best to contact your professional mover and ask for a free quote.

Rent and Deposit

Rent is a fixed amount you can count on each month if you haven’t made some other arrangements. For example, the one where you are not bound by the contract to stay for a stipulated period of time but which does not bind the landlord to a fixed amount of rent either.

Apart from having enough money to pay the rent for at least a couple of months, you will probably have to pay a security deposit usually required by the landlords and rental application fees. Bear in mind that utility companies might also require deposits or connection fees.

Utilities

Usually, gas and water are paid by the landlord as they are not very expensive. Electricity depends on your consumption, but it shouldn’t be a huge burden either. Cable and internet are often offered by providers in a package along with the cell phone at a lower rate, but make sure to ask about the installation fee. 

In some apartment complexes, there are additional fees for pets, garbage, parking, administration, and security, so be sure to check that before making the decision. There may also be an administration fee for the credit check. Remember to calculate the broker’s fee if you hired one to find you an apartment.

Moving Out for the First Time: Budget Guide

Food and Supplies

Filling up the kitchen for the first time is a costly business, but you can start with basics. Even though food is not very expensive, it is still a regular expense you have to count on every day. Also, you can cut down on food expenses considerably by cooking your own meals or getting only the basic supplies.

Getting Insurance

Renters’ or tenants’ insurance is a reasonable way to protect your belongings from theft or other misfortune and many management companies demand it as mandatory protection. It is usually not expensive and you can also get a discount if you bundle it with car insurance.

Credit Rating

Creditability is very important if you want to qualify for a loan, but young people are often careless and fail to pay their bills on time, thus ruining their credit possibilities. So be responsible in that respect or you will face the consequence of not getting the loan when you need it the most.

Watch Your Budget

You need to be realistic and compare your income with your expenses to see how much you can save or where you need to cut down. Run a test by keeping track of how much you have spent on food in a week, for example, or on your phone bill, just to get the basic idea.

Watch Your Budget

Create an Emergency Fund

Before moving out, save some money for additional or unexpected expenses. Start with small amounts months before relocating to assemble a basic rainy-day fund.

You can save money by cutting down on unnecessary expenses. For example, by making a good deal with your cable provider and getting the reduced rate for the first period of subscription. Or by relocating during the working week, and avoiding weekends when the prices are higher. Also, be modest with the furniture at first.

Get an additional job or work extra hours to earn more. Also, living with a roommate significantly reduces living costs. 

Falling Into Debt

Create a repayment plan to settle the debt, even if it means having to make some sacrifices. If you don’t have any debt, save money and avoid getting into one.

Falling Into Debt

Things to Avoid

The most important thing to avoid is doing things hastily. Moving out from your parents’ place requires careful planning and detailed research, so do not make a mistake of thinking you will deal with problems later, but rather plan in advance and make reasonable estimations.

Other Money-Related Issues

Apart from the apparent costs of living, there are side expenses we often forget or minimize, but which can be relatively costly on a monthly basis, such as transportation, coffees, and snacks during your lunch break, health services, and medications and so on.