Moving out and on your own is an exciting step towards independence, but the financial responsibility can also be shocking if you’re not prepared. There are a lot of odds and ends that you need to plan for, as well as a lot of expected (and unexpected) costs associated with the move. Here are some tips to prepare:
Estimate Your Living Expenses
Use a budgeting tool to estimate what your “on your own” budget might look like. After you subtract your existing expenses from your income, how much can you comfortably allocate to rent, utilities, renter’s insurance and other living expenses? Keeping this figure in mind will help you narrow down your apartment search.
Generally, you should use no more than 30% of your budget to cover housing related expenses, but that isn’t necessarily realistic if you’re just starting out or living in a high cost of living area. The most important thing is to ensure you have room in your budget each month to cover all essentials, put money towards your savings goals, pay down any debt and still have some leftover to cover discretionary purchases. Using a budget tool can also provide insight into areas where you can save money — such as opting for a cheaper phone plan or splitting costs with a roommate.
Check Your Emergency Fund
It’s recommend to have at least three months’ worth of living expenses set aside in your emergency fund. In the event of the unexpected — such as a trip to the hospital, a flat tire or job loss — this fund can help you cover essential living expenses while you get back on your feet.
If you fall behind on rent or your utility payments, you may be on the hook for late fees and interest. Eventually, your services will be cut off or you’ll face eviction, and your account will likely be sent to collections. This can impact your ability to receive utility services or qualify for an apartment in the future, as well as affect your ability to qualify for a loan or credit card. If you are aware that an upcoming payment will be an issue, be proactive about contacting your providers — they may be able to provide temporary assistance or other reasonable options.
Plan for Deposits
When you move into a new place, you will need to cover certain deposits meant to insure against loss from unpaid or underpaid bills. Deposits are typically refundable when you move or cancel the service.
The average security deposit for an apartment is typically about 1-2 times your rent. If you have a pet, you will likely also have to pay an additional pet deposit. If your rent doesn’t cover certain utilities — such as electric, gas, water, sewer, trash and cable/internet — you may also need to pay a deposit when you set them up.
What Do You Need for Your Apartment?
Moving into your first place also means you need to plan for furnishings and essentials. Download the first apartment checklist to help you start planning. What do you already own, and what do you need to buy? Prioritize your needs and wants. You’ll need a bed and cleaning supplies right away, but you might be comfortable waiting awhile to buy a couch or microwave. Set a budget and stick to it. Save money by checking out thrift stores, online used marketplaces and discount stores.
Download the First Apartment Checklist
Make a Moving Plan
Regardless of your plan, you’ll need to factor in the cost of packing materials, like boxes, tape, markers and bubble wrap.
Are you planning on hiring a moving company? You can look into full-service movers that handle it all, or self-pack movers who take over after you’ve boxed up everything yourself. In addition to looking at prices, you’ll want to read reviews, and ensure the company is licensed and holds insurance.
Are you doing it yourself, and/or have family and friends helping? If you need to rent a moving van, remember to include funds to cover gas and insurance on top of the quote. If a friend is volunteering their truck or van, don’t forget to cover their gas — and a gift or buying lunch to thank them for their help can go a long way.
Stay Organized
Buy a folder to organize copies of contracts, receipts and other important information for your rental and move in day. Before you start bringing in your boxes, do an inspection and take pictures of your apartment for when you move out — having a record of existing scratches and dents can help save on maintenance and cleaning fees later.
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