If you are just back home from college or haven’t left yet, you may be counting your pennies to try to get out and move out on your own. Living with your parents can have its perks such as free dinners and a place to do laundry, but at some point in your adult life, there comes a time to jump out of the nest.
However, before you take the leap, you want to make sure you are in a good enough position to support yourself or else you will just wind up back where you started: Friday nights with mom and dad. To avoid the “boomerang effect,” you should meet some financial criteria before venturing out on your own.
If you have found another place to live such as an apartment or house to rent, you should write down all of your bill expenses to make sure your income covers them. You may have to start paying back your student loans as well, so make sure you factor in debt to that equation.
If you create a detailed monthly budget, you will be able to account for all your expenses and see what you spend on essential needs and non-essential needs. If you need to save a little more or wait till you get that promotion, then it isn’t in the cards to move out yet.
However, if you write down your spending, you could see what frivolous purchases you can cut out to get your savings on track and your butt moved out. You can use a house payment calculator to find out how much you can spend on your apartment or home.
You should also make sure you have enough saved up for an emergency fund. You can start small with $800 to $1,000 and go from there. You should want to eventually have three to six months of living expenses for unanticipated expenses like medical emergencies, deductibles or vacations. You should build this emergency fund while you are living at home and your living expenses are low.
Another way to make sure you can handle bills and rent is to move in with roommates. When you rent a house or apartment, you need a security deposit that is potentially your first and last month’s rent as well as hook-up fees for utilities. A way to ensure a smoother transition and save money, a roommate or roommates can help split the costs. This can also help you look for nicer, more expensive places to live that fit your budget because you will be able to split the costs.
You should also make sure that you are ready to move out and stay out for at least a year. Leases commonly last a year or longer and you need to be prepared to stay for at least that long. If you move out too early and break your lease, you may have to pay the balance of your lease and hurt your credit score.
Moving out involves planning and budgeting. A well-thought-out plan can ensure you are ready to be out on your own and form good financial habits that will follow you into the future.