Living on your own might be a dream come true, but the financial implications of having your own place can be more than you anticipated. This isn't meant to discourage you, but you have to be realistic.
Here are seven ways to save money when moving out of your parents' house.
1. Educate yourself on living expenses:
The transition from living at home to living on your own can be challenging. But you can make this transition easier if you familiarize yourself with living expenses beforehand.
The cost of living on your own might be more than you realize. Being on your own involves more than the ability to pay your rent every month. You also have utilities such as gas, electric and cable, and some expenses can fluctuate. You'll have personal expenses like transportation costs, student loans and other debts. Additionally, you have to eat and prepare for one-time expenses that can catch you off guard like yearly personal property taxes and car maintenance.
Sit down and have a money discussion with your parents. It might also help if you assist them with paying their bills for a few months, so you get an idea of what to expect.
2. Get a roommate:
You might like the idea of living on your own without someone bothering you. But if you only have an entry-level salary, it might not be enough to support yourself — it all depends on where you live and the cost-of-living in your area. Getting a roommate, however, can make your transition easier and doable. Since you're splitting household expenses down the middle, you won't have to spend all your money on bills and you'll have disposable income for other things, such as paying off debt and saving a cash cushion.
3. Take baby steps:
As a young adult fresh out of college, you might want what your parents have now. Just know that it took your parents years to acquire their lifestyle, so you shouldn't expect the same for yourself right away. The worst thing you can do is jump into a large mortgage or rent payment before you're financially ready. Take baby steps and start with an inexpensive housing payment, and then gradually upgrade.
4. Use your network:
When moving out of your parents' house, there's also the expense of the actual move. You have to buy boxes, rent a truck, etc. These costs can add up quickly, but you can minimize expenses by using your network. Maybe a friend recently moved into his own place and he has empty boxes lying around. Or if there's a grocery store nearby, you might be able to grab a few free boxes. Instead of renting a truck, contact a couple of friends or relatives who have pickup trucks and ask for their help transporting your belongings.
5. Compare utility rates:
It might come as a surprise, but according to LocalElectricityCompanies.com, "you have the power to choose local electricity." Comparing utility companies might seem tedious, but it can save money and improve your household budget. Rates can vary by provider, so comparison shopping is one of the best ways to ensure you receive the lowest rates.
Electricity isn't the only household expense you can control. You might be able to choose your natural gas provider, or do without a landline phone if you have a cell phone with excellent reception. Given the various options for streaming movies and television shows, you can also skip cable and keep additional cash in your pocket.
6. Sign a longer lease:
Depending on the landlord, you might have the option of signing a 6-month, 12-month or longer lease. If you're trying to keep your housing costs manageable, consider going with a longer lease term. Some landlords will cut you a break and offer cheaper rent the longer the lease agreement.
7. Identify your needs and wants:
To save money, it's also important to identify your needs and wants. Some young adults get into financial trouble because they can't deny themselves, and they use credit cards to buy things they don't need. It's okay to splurge and enjoy the fruits of your labor, but in moderation. Before buying clothes or electronics, sleep on the purchase for a few days and consider whether you actually need it and whether you can afford it.
Moving out on your own can be an exciting time, but only if you're financially ready. The above tips can make your transition easier while helping you manage your cash flow.