Before you prepare your moving budget, consider all the costs of moving out on your own, not just your rent or mortgage. Expenses generally fall into three categories:
This section focuses on rental expenses, but many of the expenses listed here apply to buying as well. To manage costs within your budget, you may want to think about living with a roommate.
When you start renting, you are usually required to provide the first and last month’s rent (essentially, double the regular rent amount).
You may also need to provide a security deposit to cover potential damages to the rental unit. The deposit is often refundable when you move out, provided you have met your obligations as a tenant and left the unit in the same condition in which you found it.
To protect yourself from future charges, make sure you document any damage to the property that is present before you move in. Note any issues and discuss these with the landlord before signing the lease and moving in.
If you are opening a new account with a utility, cable, Internet or telephone company, you may be required to pay a new account opening fee and a security deposit. The security deposit is often refundable after some time as long as you have paid your bills without delay and don’t owe any money.
Whether this is your first place or your thirtieth, moving always involves start‑up costs. Here are some things to consider when budgeting:
Use the Start-Up Expenses Worksheet to figure out the one-time fees you’ll have to pay upfront when you move out.
To keep your start‑up costs to a minimum, try to reduce what you spend on things you need to outfit your place. You can often find items advertised for resale or at garage sales, or obtain them from friends and family. Another approach is to use what you have and replace things over time; that way, you are not hit with all the costs at once.
Whether you rent or buy, there are likely to be ongoing expenses above and beyond your monthly rent or regular mortgage payment. Depending on what is covered in your lease, the costs can include:
The Ongoing Expenses Worksheet will help you keep track of the costs that you’ll need to pay on a regular basis.
In general, rent or mortgage payments and other household-related expenses should account for no more than 40% of your take-home pay. For example, if your take-home pay is $3,000 a month, you shouldn’t pay more than $1,200 a month for your housing costs.
Living on your own can be costly. Having a roommate (or more than one) can help lower your overall living expenses since you share the rent, utilities and other household expenses.
Finding the right roommate and deciding on your living arrangements can be part of the fun of moving out on your own—but it can also be a hassle. Write down what you are looking for in a roommate to help you make up your mind about whether someone would be a good fit. For example, if you are a student attending classes during the day and working at night, you may want to find someone with a similar schedule.
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