Are you moving out of your parents home to live on your own? Going your separate ways with a roommate? Going through whatever event life has thrown at you, urging you to move out of your current residence? If you answered yes to any one of these questions, then you most definitely have money on your mind. How much of it you will need to move out, to be exact! The financial responsibilities of moving from one place to the next can be overwhelming, and full of uncertainty. Therefore it comes as no surprise that it is the number one concern for most folks going through this transition. So if you’re asking yourself, how much money to save before moving out? You’ve come to the right place. Stay tuned as we address some of the top expenses you can anticipate for when moving, helping you gain a better understanding of how much money to save before moving out.
How much money to save before moving out?
You will need to take your lifestyle into account when determining how much money you will need to save before moving out, or at least the lifestyle that you would like to keep up with throughout this transition. Will you have to make sacrifices as a result or will you go about business as usual while still being able to save for your move?
Primary expenses to consider when saving money to move out is rent and security deposit. Although it is recommended that you only spend 30% of your gross monthly income on rent, people relocating to a large city like New York City can expect to surpass this threshold. Know what the rent is going for in your desired neighborhood, and at the very least, be prepared to put aside for your first and last month’s rent. Don’t forget the security deposit, which can easily range between .5 to 1.5 of your monthly rent.
- Moving costs
The cost of your move is determined by a number of factors. Are you planning to hire a professional moving company or DIY? How far are you moving and how much stuff you have? Your costs will vary depending on the answers to these and other moving questions. Determine your preference and take into consideration all of the options available based on your choice. Despite popular belief, it isn’t always cheaper to perform the move yourself than to hire licensed movers. Compare the rates by getting an estimate from top three movers.
If you’re already moving with enough furniture to fill your new place, then you won’t have to take furniture expenses into account when budgeting for the move. Otherwise, furniture expenses need to be examined when determining how much money to save before moving out, unless you have no problem sleeping on the floor. Shopping for furniture doesn’t have to break the bank, with patience and perseverance you can fully furnish your new place even if you are on a tight budget.
- Miscellaneous costs
Everyone has a different lifestyle and will therefore have their own set of expenses that go beyond the top three mentioned above. Let’s take a look at some of the more common, additional costs you may have to consider when figuring out how much to save before moving out.
- Groceries – Expenses associated with food cannot be avoided, budget them in!
- Transportation – Transportation costs vary from person to person. Do you drive or take public transportation? Gas isn’t cheap, but don’t underestimate the cost of public transportation, it can really add up, assuming you use this service 5 days a week. Either option can equal up to several hundred of dollars a month, which is certainly a high amount to take into account when saving for the move.
- Utilities – Depending on what utilities are included in your monthly rent, utility costs can also be added up to several hundred. Utility costs are unique to each individual. Consider your needs, and budget accordingly.
- Loans/debt – An average person is more than likely to have at least one bank loan and several credit cards that require a monthly payment. Whether it’s your school loan, car loan, or credit cards, do not forget to take your outstanding debt into consideration when saving for the move. Even one missed payment can have an affect your credit score.
- Contingency plan
If possible, set up a contingency fund that goes beyond the potential costs mentioned above. Life is unpredictable, and moving is not always as straightforward as we would like it to be, being prepared for the unpredictable will give you a peace of mind.