How much does it cost to move out?
7 questions to help you prepare financially to get a place of your own.
Moving to your own place for the first time is exciting—it also takes money. If you’ve never lived on your own, you might not be aware of all the costs that come with an apartment or home. These seven questions will help you discover how much money you need move out.
How much are your bills?
If you already have a budget, good for you! If you don’t have one, it’s time to start gathering information. Look over your last six to 12 months of expenses. Tally up the cost for everything you spend, including:
- food—groceries, take-out and dine-in
- car—gas, maintenance, repairs, registration and insurance
- debt—credit cards, auto and student loans
- cell phone
- clothing and shoes
- entertainment, gaming, sports or hobbies
If you don’t have records for the last six months, that’s okay. Start tracking expenses now so you can see exactly what you’re spending. And, here’s how to start a budget.
How much can you afford?
As a rule, housing costs should be no more than 30% of your income.
To qualify for a rental, landlords will want documentation of income. Often, they require renters to have earnings of at least three times the rent.
If you’re looking to buy, lenders look at your finances from a different perspective. Specifically, lenders look at your debt-to-income ratio. This figure provides a snapshot of how much you owe for student loans, credit cards, auto and other loans in relation to your income. Generally, lenders look for a debt-to-income ratio of 35% or less. Typically, the lower your debt-to-income ratio, the lower the interest rate you can get on home loan.
Do you have an emergency fund?
A landlord or lender won’t ask if you have an emergency fund, but it’s one of your best tools for navigating unanticipated expenses.
Save three to six months of living expenses before moving out so you’re prepared for the unexpected. Check out these tips for building up an emergency fund without feeling deprived.
What will it cost to move in?
If it’s your first time getting a place of your own, you might be surprised by the expenses you’ll be required to cover.
When leasing, there will be application fees, a security deposit, and sometimes first and last month’s rent. There may also be non-refundable move-in fees. Fees vary from property to property; identify a few properties you like and research their fees.
Buying a home costs more than the purchase price. In addition to loan closing costs and inspection fees, homeownership comes with a host of expenses first-time homebuyers may not be aware of. Avoid surprises by learning what a new home really costs.
What will it cost to move?
If you have very few possessions and can move them in your car or with the help of friends, your moving expenses will be very low. However, if you have a lot of stuff, you may need to rent a truck or hire a mover.
Rental trucks for local moves are relatively inexpensive. If you’re making a long-distance move, costs will be higher. Fees for movers depend on how much you’re moving and how far.
What furnishings do you need?
Hand-me-down furniture is a good way to start furnishing your new place. However, there will probably still be things you need to buy. Create a budget for the furniture, kitchenware and other items you’ll need.
Second-hand stores are a good source for dishes, furniture and accessories. Some folks enjoy turning a trip to a thrift store into a treasure hunt or treating it like sport.
What expenses did your parents cover that you’ll now pay for?
Living at home comes with a lot of perks that you may not always notice. Moving out means you’ll have to take greater financial responsibility for recurring expenses like:
- groceries, toilet paper and cleaning supplies
- renters or homeowners insurance
- internet, cable and streaming services
- utility bills
- possibly a longer commute to work
- garbage pickup
How to save for your goal of moving out
Setting up a savings account at Consumers is simple and you can name the account anything you want, like “Paisley’s New Place.”
Automatic transfers between accounts make saving a no-brainer, and they’re easy to set up. Each time your paycheck is deposited, designate a set amount that automatically goes into your “moving out” savings account. Track your progress any time with Online Banking or the Mobile App.
Consumers helps more than 2,000 members finance land, first and second homes, and home improvement projects each year. We’d love to help you with a mortgage or home equity line of credit; contact us online or call us at 800-991-2221.