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Preparing to move out of home for the first time

Wilson Luna

One of the biggest steps in any life is preparing to move out of home. Moving from home means you are ready to venture out into the world and begin a new life of independence. Of course, that independence comes with a price. No longer do you enjoy the rent-free, bill-free existence of living at home. Now, you must face the cold hard reality that you are going to have to start paying bills as your parents did throughout your childhood. So, how can you prepare yourself for this sudden realisation?

How Much Can You Pay For Rent?

The first thing you have to do is to determine how much rent you are going to be able to pay each month and how much money you have left over for bills and food. The best way to do this is through a budget. By creating a budget, you can look at your current income to determine how much you have to spend on rent and bills. However, there is more to this than just finding how much you can afford. For example, if you can afford $400 a month, then you may have to either room with someone, or you are going to have to find a place that is cheaper and that can come with its own problems. You need to then determine where you want to live and if you want to live with anyone because that will make a difference on how much you decide to pay.

Other New Apartment/Home Costs

Your rent is not the only thing you have to look at for costs. There are several other costs related to beginning to rent your own apartment or home. These costs include:

• Bond Deposit : This is a damage and rental deposit. Generally its between four to six weeks rent. Before you sign the lease, make sure you know what the damage deposit is and what damage is covered. Usually wear and tear is covered. As a result, you should try to have at least three months rent saved up in your savings account to cover costs.

• Pet Deposit: If you are bringing any pets with you, you can expect that your new landlord will ask you for money in case the pet causes any damage or loss of revenue to the landlord. Like the rental deposit, you should find out what damage is covered by this.

• Utilities Deposit: If you have poor credit, or have never had an account with a utility company, they may require deposits. These deposits, like most that you pay, will be given back to you at the end of the term that you use the utilities. This is why you should always try to find apartments that pay for some or all of your utilities. That can save you a lot of money.

• Parking: If you have a car, and you live in a high-density area, then you are going to have to pay for parking in most cases. This will usually cost about $30 per month, but can be more. Try to find an apartment that has free parking included in the rent.

Your Bills

The best course of action with bills is to ask people who already have bills how much they pay on average. Then, you can use that information to determine how much you need to pay each month. If you find that your bills are going to cost you about $200 per month, then you should have $600 saved up so you have three months grace to pay your bills. The problem with bills is that if you miss one, then you owe more on the next one, and you have to find a way to pay that off, and if you don’t, it keeps increasing. It is a vicious cycle to be in. Don’t forget about possible deposits you will have to pay as well. Talk to the utility companies to find out what kind of deposits will be required so there are no surprises when you sign up.

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Tags: money management advice, budget, moving out of home

Author's Biography

Wilson Luna is an author, wealth adviser and founder of Your Family Your Money. Your Family Your Money’s goal is to simplify traditionally complex financial strategies, demystify financial jargon and debunk common financial myths, becoming every family’s first stop for financial advice, information and inspiration.