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Embark on your independent journey without emptying your wallet
If you're itching to leave the nest at 18 but finances are tight, fear not! With a bit of strategizing, you can make the leap to independence without breaking the bank. Dive into this comprehensive guide to discover the secrets of moving out affordably and smoothly transitioning into adulthood.
Essential Tips to Keep in Mind
- Plan ahead by securing employment, saving money, building credit, and determining your living arrangements at least 6 months ahead.
- Establish checking and savings accounts, craft a budget based on your income, and aim to save 3-6 months' worth of living expenses before your move.
- Communicate your intentions with your family, find housing within your budget, and set up utilities for your new place.
Step-by-Step Guide
Secure Employment or a Side Gig.
Land a job that provides sufficient monthly income for your expenses. If you're still in school, working part-time after classes and on weekends can help you save up for your future move. Additionally, consider taking on a side hustle to explore potential business ventures and earn extra income. Here are some side hustle ideas to kickstart your journey:
- Freelance writing
- Pet-sitting for neighbors
- Dog-walking in your community
- Blogging
- Food delivery
- Tutoring students
- Babysitting or offering childcare at home
- Self-publishing ebooks
- Launching a YouTube channel or streaming on Twitch
- Selling homemade products online or at local markets
Set Up a Bank Account.
Establish both checking and savings accounts. Opening a bank account is crucial for managing your finances and ensuring the safety of your funds. Seek recommendations from trusted friends or family members for a reputable bank or credit union. Inquire about any fees, online banking options, mobile apps, and interest rates for savings accounts.
- When opening an account, bring your social security card or another valid form of government ID, along with a driver's license or passport, and proof of address.
- Be prepared to make an initial deposit ranging from $25 to $100 for a checking or savings account.
- Consider applying for a credit card that offers cashback rewards on everyday purchases like gas or groceries to boost your savings.
Develop a Monthly Budget.
Create a detailed budget outlining your income and expenses. Drafting a budget enables you to track your monthly spending habits and identify areas where you can cut back to save money. To assess your current spending patterns, list all your monthly expenses, tally them up, and subtract them from your total income.
- Consider using budgeting apps like Mint or Empower to automate the process.
- Each month, record your anticipated earnings and expenditures. Track your daily spending and review it at month-end to evaluate against your budget, aiding in future budget planning.
- Even without employment, monitoring expenses fosters financial awareness, better preparing you for independent living.
- Most rentals mandate a security deposit, along with first and/or last month's rent upfront, necessitating advance savings.
Build Your Savings.
Strive to accumulate 3-6 months' worth of living expenses before departing. Saving money not only provides a safety net for unforeseen costs like vehicle repairs or medical emergencies but also facilitates housing acquisition upon moving out. Aim to allocate 20% of your income toward savings monthly to amass funds for this significant milestone. Here are additional strategies to bolster your savings:
- Terminate unnecessary or unused subscriptions to streaming services, periodicals, etc.
- Opt for homemade meals over dining out.
- Shop with a grocery list to curb impulsive spending.
- Obtain a library card for borrowing books, movies, audiobooks, or board games, with some libraries offering household equipment or free museum passes.
- Explore cost-free entertainment options in your vicinity, such as local concerts or festivals.
- Purchase generic store brands instead of name-brand products at the supermarket.
Establish Your Credit.
Develop a solid credit history to qualify for loans and financial services. Certain life milestones, like renting an apartment, may necessitate a credit score. Here are strategies to enhance your credit score promptly:
- Apply for a secured credit card, requiring a refundable security deposit, with your credit limit determined by the deposited amount. Responsible usage can elevate your credit score.
- Repay your credit card balance in full each month to avoid reaching the limit, which may lower your credit score. Utilize your card for minor purchases like gas or groceries and promptly settle the dues to boost your score.
- Become an authorized user on a family member or friend's credit card to leverage their credit and establish your credit history.
- Aim for a credit score above 620 before relocating to streamline your rental application process and mitigate upfront costs.
Develop essential life skills.
Enhance your life skills prior to your moving date. While moving out can evoke a sense of independence, it can be overwhelming if you lack knowledge in cooking, cleaning, laundry, grocery shopping, or scheduling appointments. Don't fret! Everyone starts somewhere. Here's a comprehensive list of skills you can begin learning to prepare for the big move:
Inform your family about your decision to move out.
Sit down with your family and communicate your intentions to move out. Sharing your plans to move out with your parents may feel daunting, but their support could be invaluable when setting up utilities and applying for accommodation. Prepare a detailed plan to present to them beforehand, outlining your budget, proposed moving date, and chosen location.
- Announcing your departure may make your family feel neglected, so involve them in the moving process to demonstrate your appreciation and inclusivity.
- Respect your family's emotional response, allowing them space to process the news if needed.
- Avoid keeping your departure a secret from your family; should any challenges arise, knowing you have their support to fall back on can provide reassurance.
Transfer any existing bills into your name.
Transfer any shared bills to your name. If you're part of a family plan for your phone or car insurance, explore the option of switching to an individual plan for cost efficiency. Compare rates from various providers like AT&T Wireless, T-Mobile, Verizon Wireless, Boost Mobile, or Mint Mobile, and seek assistance from the primary account holder if needed to facilitate the transition.
- If your phone is on a family plan, consider opting for an affordable standalone phone service. Evaluate plans offered by companies such as AT&T Wireless, T-Mobile, Verizon Wireless, Boost Mobile, or Mint Mobile to find the most suitable option.
- Request quotes from car insurance providers like Allstate, GEICO, Progressive, Liberty Mutual, or State Farm to identify the most economical coverage.
Secure dependable transportation.
Determine your transportation method for commuting to work or school. Planning your daily commute in advance aids in efficient time management and budgeting for transportation expenses. If you lack a vehicle, consider:
- Carpooling with a friend and sharing gas costs.
- Utilizing a bicycle or scooter for short distances.
- Opting for a bus or train pass.
- Purchasing an affordable used car from a reputable dealer, and arranging for a mechanic to inspect it for optimal functionality afterward.
Discover housing within your financial means.
Target rental accommodations that align with approximately one-third of your monthly income. Determine your affordability threshold by dividing your current monthly earnings (pre-tax) by 3. Explore prospective neighborhoods and respond to online listings to gauge the optimal timing for submitting rental applications.
- Utilize online platforms, local newspapers, or property management companies to explore housing options within your budget.
- Visit at least 5 properties in desired neighborhoods.
- Weigh all factors including commute time, rental costs, and utility expenses.
- Many rentals mandate renter’s insurance before occupancy, safeguarding personal belongings and providing liability coverage.
- If concerned about your credit score during application, some landlords may accept 1 to 3 months' rent upfront as a security deposit. Alternatively, consider applying with a cosigner possessing a favorable credit history.
- Thoroughly review the lease agreement before signing, seeking clarification from the landlord if needed.
Consider rooming with familiar friends.
If living solo is too costly, consider sharing expenses with a trusted friend. Co-renting with a roommate can help split housing and living costs. If feasible, opt for a roommate who shares similar values and lifestyle preferences to facilitate a smoother transition. Establish clear expectations and boundaries early on, delineating ownership of food and appliances.
- For students, colleges often provide resources for off-campus housing, aiding in finding suitable roommates.
- Divvy up household chores equitably. Whether through a chore rotation or a simple agreement to tidy up after meals, ensure mutual effort in maintaining cleanliness and organization.
- Even with close friends, adjusting to new living arrangements can pose challenges. Allow each other designated personal time weekly, and seek compromises to resolve any conflicting habits.
Arrange your utility services.
Contact local utility providers at least 14 days prior to your relocation. For utilities such as water, gas, or electricity, seek recommendations from acquaintances or neighbors and compare pricing options. Inquire with your property management about preferred utility providers, if applicable.
- Internet providers often tailor packages based on required network speeds. Use tools like this to assess your needs.
- Consider bundling internet and cable TV services from select providers to reduce costs.
Prepare and transport essential belongings.
Commence packing one month before your move. Begin by packing items you rarely use. Clearly mark each box with its contents and designated room. Since leases typically last 12 months, consider only taking essentials. Here's what to bring:
- Necessities like clothing, toiletries, kitchenware, cleaning supplies, linens, and bedding
- Vital documents such as ID cards, passports, birth certificates, and insurance papers
- Electronic devices like laptops, phones, TVs, or gaming consoles
- Personal mementos like decorations, souvenirs, or family photos
- A toolbox containing screwdrivers, wrenches, a hammer, pliers, a utility knife, and a level
- Emergency essentials like a first aid kit and flashlight
- Some cash for unforeseen expenses
Acquire furniture for your new abode.
Furnish your new dwelling with personal belongings and budget-friendly items. Check with acquaintances for free furniture or explore local Facebook groups for giveaways. Thrift stores also offer affordable dishes, cushions, seating, and décor. Here are more budget-friendly decorating tips:
- Join the Buy Nothing Project or Freecycle for local freebies.
- Create an Amazon wishlist for friends and family to contribute furniture as gifts.
- Scan Craigslist or eBay for 'OBO' (Or Best Offer) listings and negotiate for free items.
- Seek permission from your parents to repurpose furniture items you already own.
