Written by: Delta Sciur, BMgt. Finance

November 21, 2023 – Moving out for the first time can be such an exciting experience full of newfound independence and endless possibilities. Though my own inaugural move from my parents’ home was many, many years ago, the memory remains vivid. I remember the exhilaration of driving away, my car packed to the roof, and Destiny’s Child’s ‘Independent Women’ cranked about as loud as it could go. However, I was a little naive at 18 and quickly realized that moving out comes with many financial responsibilities that can really catch you off guard if you are not prepared. Here are some financial aspects to keep in mind when making this life transition:

1. Create a Realistic Budget: Before moving out, it’s crucial to create a budget that outlines your income and expenses. To create a budget that works you must determine what you are earning each month, track your current spending and get an accurate idea of your new expenses like rent, utilities, groceries, insurance, and any other new recurring bills. If your income does not cover the essential expenses with some room for savings and spending, you may need to get a roommate or delay moving out.

2. Establish an Emergency Fund: An emergency fund is your safety net for unexpected expenses such as a sudden job loss or car repairs. Aim to have at least three to six months’ worth of expenses saved in a high-interest savings account. Strive to save this before moving out so you can weather any potential  storms without falling into debt.

3. Plan for Moving Expenses: Moving itself can be expensive. Be sure to budget for moving expenses like hiring a moving company (or buying your friends pizza and beer). Budget for purchasing furniture and household items (cleaning supplies, stocking up your pantry, dishes, and cookware- it all adds up). Lastly, before moving out ensure you have money set aside for paying utility or damage deposits if you are renting (typically one month’s rent).

4. Consider Rental Costs: If you are renting, your monthly housing costs will be a considerable chunk of your budget. Be sure to understand the rental market in your chosen area. Make sure to factor your monthly rent and renter’s insurance into your budget.

5. Utility Bills: Utilities, including electricity, water, gas, and internet can add up quickly. Trust me, they do not come cheap! Brace yourself for these expenses and make sure they are on your budget radar. Practice conservation to keep these bills in check. Implementing a programmable thermostat would allow for the optimization of temperature settings and enhanced cost-efficiency.

6. Transportation Expenses: Your mode of transportation plays a significant role in your expenses. If you’re moving to a city with public transportation, this might be more cost-effective than owning a car. However, if you need a car, budget for gas, insurance, maintenance, and potential car loan payments.

7. Student Loans and Debt: If you have student loans or other outstanding debts, these obligations should be factored into your budget.

8. Health and Dental Insurance: Maintaining health and dental insurance is very important as without coverage, these expenses can be substantial. In some cases (depending on your age) you may be able to stay on your parents’ plan or your employer may provide you with coverage. If not, you will need to budget for health insurance premiums.

9. Build Good Credit: Your credit score can have a significant impact on your financial future. Paying bills late is common for the newly independent. Pay your bills on time by setting reminders on your phone or setting up automatic payments. Use your credit responsibly and monitor your credit report regularly to ensure accuracy.

Taking the plunge and moving out for the first time is like leveling up to independence mode. But to ace this new adventure, you have got to be financially savvy from the get-go. Its all about crafting an accurate budget, getting the lowdown on how much it costs to live on your own, and having a game plan for those must pay bills. With a strong handle on how to navigate your own finances, you will unlock the full potential of newfound freedom.

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Delta has over 13 years of experience working in the financial industry. She began her journey with Financial Services Group in December 2010, and became a full-time team member at FSG in June of 2014. She is currently working towards her Qualified Associate Financial Planner designation.