In 2012, I wrote an article about achieving the financial freedom required to move out for the first time, and becoming self sufficient - after all, once you're out, there's usually no going back! We covered the basic skills needed in order to reach financial adulthood such as budgeting, calculating start up costs, creating a food plan, and saving an emergency fund.
But what will moving out on your own actually cost? What changes will you need to make to your current lifestyle? Let's take a closer look at move-out start up expenses.
The costs of moving out
Moving out for the first time can be expensive. Expect to pay three types of costs when you venture out on your own: deposits, start-up costs and ongoing expenses. Being financially prepared for the big move ahead of time can minimize any financial burden you might feel later.
Save up for those deposits
Unfortunately, when you first move out you won’t just be dealing with life on your own for the first time, but you’ll also be paying bills for the first time. Since most utility companies have no idea who you are, you’ll be asked to pay a security deposit in case you decide not to pay your bills in the coming months. Your new landlord will likely ask for a deposit too. Most landlords ask for first and last month’s rent, as well as a security deposit, in case you damage their property. These one-time deposits can be financially burdensome when you’re just starting out. Give your local utility companies a call and ask what they’re looking for. Being prepared will minimize the burden on your wallet.
Determine your ongoing expenses
Besides your monthly rent, you’ll be expected to pay a number of on-going bills, including rental insurance, parking (if applicable), and utilities (cable, internet and phone included). Depending on whether or not you choose a rental unit with laundry facilities, you may have to pay the weekly cost of washing your laundry, plus transport to and from the laundromat. While most landlords take care of property maintenance, some don’t. If not, you will be left with this responsibility. If you can’t get to it yourself, you’ll have to pay someone to do it for you. Unfortunately, you cannot simply choose to leave the grass uncut or the walk un-shovelled.
Getting started isn't cheap
One of your biggest costs will likely be the physical move itself. You may have to rent a vehicle to move your items, and hire movers. Asking friends can certainly cut those costs, but be prepared to reward them with beer and pizza! When it comes to those small household items, it can be a shock to realize just how much is needed: furniture, dishes, small appliances, kitchen utensils, bedding, towels and cleaning supplies.
None of these things come cheap. Prepare a list ahead of time and slowly tick things off as you purchase each item. Finally, many companies, including utility companies for cable and internet, charge new account fees. Once paid, you’ll never have to pay them again but the expense can be burdensome – especially for those just leaving the nest.
Will you have to change your lifestyle?
Once you’ve got the expenses under control, you’ll want to take a closer look at your lifestyle to determine whether or not you can further minimize costs. Obviously, when your financial priorities were different, your entire pay cheque could be used for fun. Now that you’re out on your own, though, you may want to rethink how you spend your money. You won’t likely be able to afford the same things that you once did.
Split expenses with a roommate
To cut costs, consider moving in with a roommate. The two of you will be able to split many of the on-going expenses down the middle. Before you do so, though, you’ll want to strongly consider the person you choose to live with. What type of person are you looking for? Someone quiet and studious? Or someone who won’t mind if you invite your friends over every night? Would you prefer to live with someone who’s perfectly tidy, or someone who doesn’t mind a little mess? Is your ideal roommate active or a quiet homebody?
You’ll want to choose someone who fits your personality, especially your financial personality since the bills you split will affect your credit score.