The great old question how much money should I save to move out?

 

There are many answers to this question but first we have to get your mind right. Let’s dive in shall we!

We all have different life styles maybe you just got back from college, found a job and it’s time to get out on your own. This is what my parents refer to as the boomerang child. We left went away and just like a boomerang we are right back in the room we grew up in. This just doesn’t seem right. Well we can use this as a tool to get you to your own place. There are a few things to take into account:

1. What is your budget?

2. How much is the average rent in the area you want to live in?

3. Does that average rent fit into your budget?

4. Have you put away any savings for moving out?

5. Does the new apartment include any utilities?

6. How do I start saving for my apartment?

 

Before you start any of this process make sure you know what your credit score is. Landlords will check this score to see if you need to add anything extra to your initial deposit of if you need a cosigner. Use this tool to check your credit score

 

 

Lets start with question 1. Do you even have a budget to get a new place? We figure that out with your total net income. Net income is what you take home after taxes and other contributions. Your rent should not exceed one and a half weeks of pay. You always want to be below that but one and a half weeks net pay is the maximum. Why well if you use more than that you will have a very tight budget with all your other expenses. Here are the numbers for example:

Take home pay weekly $1000

Take home pay Monthly $4000

1 1/2 weeks pay $1500

Money left over $2500

The leftover money will be for your other expenses like food and some utilities. At the end of the month you don’t want to be left with $0 in your bank account so make sure you stick to your budget religiously.

Question 2 what is the average rent in the area you want to live? You can find this out by getting an app like Zillow.com or Rent.com.  Check out apartment hunters.

 

 

This analysis will show you the average rental prices for the area you are looking to live. Search by your criteria and you will find the prices and neighborhood reviews. This research is key to figuring out where you can and can’t afford. Also take into consideration locations of shops and areas you frequent, and your commute to work. If you require public transportation you don’t want to live to far from that.

Question 3 Does the average rent fit into your budget? This is where your budget comes into play. If the rent doesn’t fit into your budget it’s time to start searching in other areas. Make a list of things you must have, for example a close market or grocery store and things that aren’t a necessity like a local bar. Once you have your lists and your budget you can find the neighborhood that will perfectly fit your needs.

Question 4 Have you put away any money to move out? This is where you have to make grown up decisions! You have to start saving for this big move. Any extra money you come across should be accounted for and saved towards you new place. Cut back on a few coffees from a store and make it at home. Don’t go out and splurge on the new shoes just yet. Finding coupons and discounts will help you towards having savings. When you sign a lease you will need to usually pay first months rent and a security deposit. If you have savings this will be all taken care of with no worries from you.

Question 5 Does the apartment come with any utilities? This is important since each utility is a different expense that needs to be included in to your budget. Electric, gas, heat and hot water are the general utilities that are either included or you have to pay for. The other utilities include cable, internet and laundry. If your apartment includes some of these utilities you have more money back in your savings.

Question 6 How do I start saving for an apartment? This one can be done very easily. After you figure out your budget and what your rent will be you have to start putting that money into an account on the first of the month every month. This will create a habit making it seem less painful to pay rent. This account under NO circumstances can be touched. I repeat this money is what you will be using to move out of your house. There are 2 benefits:

1. you created a habit of paying rent and not having that money in your personal account will make budgeting easier.

2. You are building a savings account where you can access this money when it’s time to move out. You will have the Deposit, first months rent and moving expenses all in 1 account.

Are you starting to get a grasp on how much money you need to save to move out?

Think about it this way if you do this for 6 months while you are looking for your new apartment you now have 4 months rent sitting in an account after your initial expenses to pay your rent and maybe even decorate a little. When the first of the month comes you are already conditioned to pay and it has become a savings habit.

So in summary how much money should you save to move out is at least 6 months with your budget in place and your knowledge of the renters market and you will be in a great position to enjoy your new place.