You may feel emotionally ready to move out on your own, but are you financially prepared? Living independently means much more than not having to be home by curfew; it comes with a great deal of financial responsibilities. Before you take the leap, know how much the big move will cost you, now and in the future.
Moving out
There are many costs to prepare for just to walk in the door of your first home. You may need to save for at least a few of these big ticket items:
If you will have roommates, you’ll be sharing at least some of these costs. But even with a quick estimation, you can see that you may need to save quite a lot to leave home.
Monthly bills
Once you are in your own place, the costs continue. It is extremely important to pay all bills on time. If you don’t, you’ll probably be charged late payment fees, and if left unpaid, they will go into a collection agency. Dealing with collectors is not only highly unpleasant, but the negative effect on your credit report is severe. And if you default on some, such as phone or utilities, you may not be able to turn them on again until they’re paid (and even then it can be difficult).
If you are sharing your home with roommates, establish how the bills will be paid from the beginning. You may be able to split some and have each one send a check for their portion of the amount due. Another option is for one of you to act as the money manager and collect from the others. However you arrange it, if the accounts are in your name, know that you are responsible for sending the complete payment in on time.
Moving out and living independently for the first time can be a thrilling experience. You can make it even better by being financially prepared and responsible from the beginning.
Copyright © BALANCE
To help you manage your personal finances, Hanscom Federal Credit Union offers a free Money Management Planner. It includes instructions, worksheets and tips to help you make the most of your money. Download your copy to get started.
Others are reading:
6 Security Steps for Protecting Personal Information
Budget Smudget! Create a spending plan instead
Should I buy, lease, or look for a car leasing alternative?
3 steps to reduce credit card debt fast
Easy Ways to Save Money on Your Water Bill