Are you financially ready to move out?
How Much Money Does It Take to Set Up a First Apartment?
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First Furnishings for a First Apartment
Cost of Renting A First Apartment
Winterizing an Apartment
I am currently in my first year of college and have started a more or less long-term job. I am making, as of now, $7.75 (with much room for improvement) an hour and I'm working just under full-time. I am getting to a point in my life that I want to move out of my parents' house and live on my own, but I don't even know where to start! I'd like to know how much I should have saved initially before moving out. Also, how much should I budget for in a month (apartment, food, gas, etc.)? And is it better to get a roommate?
Stay Home for Now!
I did the math with the information that you provided, and unless you are going to live in a tent, a free tent, you don't make enough to live on every month. You will only have about $1,000 take-home pay monthly. I understand the urge to move out of your parents' house. I did the same thing at about your age, but I just ended up moving back home when I didn't have enough money to live on. In order to move into any apartment, you have to have the first and last months' rent and usually a security deposit as well.
What about furniture? Do you have any of your own? Unless you relish sleeping on the floor, buying furniture will be another expense that you don't have the money for. You not only need a roof overhead, but you need electricity, water, trash pickup, food (which would be at least $150), phone and transportation (a car or bus pass) every month. Many of these accounts also require a deposit to set up. A roommate (or 2 or 3) would be a necessity.
If I were you, I'd work out some sort of arrangement at home. Are you close enough to get to school every day from there? With $1,000 take-home pay, you can build up a nice savings account and maybe get a 401k or Roth IRA going. You have time on your side right now. The interest that you will build up over time will be amazing with very little investment on your part at this point.
Be smart. In most places, you can't survive on $1,000 a month. Don't finish school in more debt than you have to. Stay home!
Amy in ABQ
Rent a Room in Someone's House
You want to move out of your parents' home, but more importantly, you want to avoid having to move back in if your new living situation does not work out! I've been a landlord (renting a house I owned) and currently rent a room in my home to a college student.
- Try renting a room in someone's home. It's generally quite a bit cheaper and you don't have to furnish it from scratch. It's even better if you have kitchen privileges.
- At your pay scale, a roommate or two is probably needed. Find a person you know who already trusts you, such as someone in your church or school who wants to rent a garage apartment. That will probably be your best way to prove yourself as a credible renter to future landlords.
- Never, ever, be late with rent for any reason. The person you are renting from needs that income, just as you need a place to live. Have an emergency fund of one month's rent so you can pay when you miss work for illness or have a car repair bill.
- Talk with your landlord about the "house rules" and come to a good understanding of what is expected before you move in or sign a lease! Are overnight guests okay? Pets? Late nights? Parties?
- Get renters' insurance. Budget $200 a year for this, so you are covered on loss of clothes and such.
Two Steps before Finding First Apartment
It is an admirable thing to want to move out on your own. The first thing you need to do is work out a budget based on the area in which you live. Based on what you are making, you will probably need a roommate. You should look in your local paper or check with local realtors to find out how much typical rents are where you live.
Many apartments have basic utilities like electric and water included. Some do not. You would need to find that out. If they are not included with your rent, the manager or owner of the rental should be able to give you an estimate of what those things usually cost. Don't forget to budget in periodic expenses like insurance (renters, automobile, and health), taxes, and the occasional repair or emergency. Your variable expenses like food, gas, entertainment are highly variable and dependent on how frugal you plan to be.
Unless your parents are trying to get you out of the house sooner rather than later, this is what I would do:
- Make out a budget, as realistic as you can, based on the information you can acquire.
- Stay at your parents' house for a while longer, but allocate your money as if you weren't living there. Put your hypothetical rent, utilities, etc. into a savings account instead of spending it elsewhere.
This will help you do two things. You will be able to see if you really can make it on your own financially, without the risk. Then that money you have put aside will be there for lump sum security deposits you will need when you really do move out, as well as an emergency fund.
Practice Independent Living First
Figure out the prices for various styles of accommodation available to you in your area. Would you live in a basement apartment? Share a house? Do you want your own apartment in a high rise or a duplex? Determine what you want and need, compared to what is available and at what price. You may be surprised!
Will you want to take a pet with you? This could limit your options. Also will you need parking? If you are using public transit, is it nearby? If you are returning alone at night, is it safe?
If you are looking at accommodation that is not furnished, you will need furniture. Check articles on Stretcher.com for sources of inexpensive, or even free, furniture. Start collecting before you move out. You will also need kitchen supplies, linens, small appliances, etc.
Figure out your budget for food; try shopping and cooking for yourself for a week before you move out. Did you run out of food? Did you end up not eating what you bought? Fine-tune your budget over a couple of cycles. Remember you will also have to buy cleaning products and personal care items.
I suggest you "practice" living on your own while still at your parents' house. Pay them rent and your own share of phone, cable, etc. Ask them to save this money for you as starting funds for when you move out. Do this for six months. I guarantee you will have second thoughts when you see how this cuts into your available money for clothes and nights out. If you can handle it for six months, you should have enough for first and last months' rent, which most landlords expect, and enough spare "start up" cash plus some for emergencies.
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Brief Breakdown of Expenses for First Apartment
Most landlords expect first and last months' rent payment as well as a security deposit. I would suggest checking around in your area to find the standard.
Also, you should never spend more that 25% of your net (take home) pay on a housing payment. Therefore, with what you stated generally about income, you most likely will need to get a roommate to share costs.
Gas can vary greatly depending on how close you live to work and what type of gas mileage your car gets. Consider not only gas prices, but also miles you expect to travel in a month and the miles per gallon your car gets.
Last, average grocery expense where I live (UT) is set at approximately $150 per month for an adult female and $175 per month for an adult male. I have tested this and found it to be pretty accurate when including cleaning supplies and toiletries.
You should also have an emergency savings of $1000 to cover any unexpected expenses, and you will have them.
Take the Next Step:
- It is never too early to start saving. Compare money market rates with our best rate finder. Now is the time to start saving for your future.
- Get off to a smart financial start. Get money-saving tips and advice specifically for the 20-something crowd.
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