Are You Ready to Move Out?
According to a CBS News article, as of 2017, one in five adults or 22 percent of millennials are either staying home or moving back in with their parents. For the past two decades this number has steadily increased in people ages 23 to 37. Due to massive student loans, car payments and humble entry-level salaries, living with your parents for a few years can be a smart choice.
If you do that, you might find there will be a time when you crave the independence of adulthood in your own space. But if you move out before you’re financially ready, you could end up back where you started… in your childhood bedroom. To avoid this, ensure that you meet these criteria before taking that next step to move out.
1. You can cover your bills
Create a detailed monthly budget and track how you spend your money. Include monthly fixed expenses as well as extra expenses such as transportation costs, food, entertainment and other non-essentials. You should then subtract your expenses from your income and if you’re in the red, or spending more than you make, you should reevaluate your spending and come up with a plan for how to make an affordable living on your budget.
Before moving out, live by your budget for a few months as if you were already living alone. Use this as a test and if you are able to sustain and afford living on your budget, then it will help for a smoother transition into solo living.
2. You have an emergency fund
What is an emergency fund? This fund is used for surprise expenses that may occur so you don’t have to tap into retirement savings or take out a loan. These expenses can include medical bills, car repairs, and even vacations. According to The Balance, you should have somewhere between three to six months of expenses in your emergency fund before moving out, but you should also take into consideration your personal living situation.
3. Have your debt under control
The amount of debt you have can affect your ability to move out. Debt can hinder your financial growth for months, if not years, so it is a good idea to use your time at home to pay off debt before moving out. It’s a lot easier to eliminate debt when you only have a few expenses, so do as much as you can before you’re on your own. Those new expenses of living on your own will pile up on top of debt and monthly obligations, making it more difficult to dig yourself out of the debt hole you’re already in.
4. You can afford renters insurance
Renters insurance is a special type of insurance policy that helps protect your personal property against losses or damages that can be caused by fires or theft. It may also provide some liability protection for covered events, like if a visitor to your place trips on something, falls and injures themselves. The insurance may seem like an unnecessary expense, but can save you a lot of money compared to paying out of pocket for damages after a disaster.
5. Don’t rush
Moving out on your own is a big step. This is an exciting time for you and you might want to rush the process. If you take the necessary time to prepare for your big move in advance, it could save you in the long run.
The last thing you want to do is rush, get overwhelmed, break a lease, and have to move back in with your loved ones to regroup. Following these tips and can help you gauge where you are in your journey to move out. Be realistic and stay patient in the process so you can set yourself up for success in your newfound independence.