How to make room in your budget and save to move out of your parents' home?
Here are some tips on how to make room in your budget and save to move out of your parents' home:
#1: Set up automatic transfers. What's nice about these transfers is that they're automatic and painless. Set up an automatic weekly or monthly transfer of your checking account to your savings. At the end of every month, you'll be amazed at how effortlessly that money was moved into your savings without even touching it on its way out. If you aren't configured for automatic transfers, all it takes is a few minutes of your time to do this.
#2: Get yourself onto a budget. A lot of people don't realize that the reason they're having trouble saving is because they just can't seem to stop spending money! It's easy for us to spend $30 a day on lunch at work, when we probably only need to spend $5. The same thing happens with eating out or going to the bar with your friends. In order to set up a budget that will help you save money, figure out where your money is going and re-route it towards savings instead.
If you need help getting started with making a budget, check out my detailed article “How To Use A Monthly and Yearly Household Budget Spreadsheet.”
#3: Try the envelope system. This is a tried and true method of managing your money. Basically, you take cash out of the ATM and divide it among envelopes for spending on food, entertainment, gas, etc. At the end of each week or month (depending on how long you want to track your finances), go through all the envelopes and see where you stand. This is a simple way to put yourself in the mindset of saving and will really help you manage your finances.
If you want to learn more about the cash envelope system, read my detailed article “How To Use The Cash Envelope System.”
#4: Get rid of stuff. A great way to make room in one's budget is simply getting rid of wastefulness. Get real with yourself and think about how much stuff you've got lying around that you just don't use. Sell it and put the cash toward savings. Take the money from selling your car (or whatever other items you're getting rid of) and put it towards your savings goal.
What if the move comes suddenly (perhaps you end a relationship or your parents want you out). How can you prepare for the unexpected?
Keep a little cash on hand. It's always nice to have some money in the bank that you can use for an emergency. You never know when something like this might happen and it's best to be prepared. If you keep your budget tight and save whenever possible, emergencies like this will be easier to deal with.
What living expenses do you need to consider?
These are the expenses you need to prepare for when living on your own:
• Utilities (gas, water, electric, etc.)
• Food and Groceries
• Cell Phone Bill
• Internet Connection/Cable
You'll also want to make sure you have a little extra money for emergencies. Depending on where you live, these expenses will cost you anywhere from $600-1000 monthly for basic needs.
Sometimes people forget about their savings in case of an emergency. These are the things that you'll need to plan for when you live on your own.
How can you know if you can afford to move out of where you are, move into your new place, get settled on your own and make it work?
You know you can afford to move out of where you are and get a new place if after doing your research, you have enough saved up to cover the moving costs and your monthly expenses. You should have enough money in your budget to pay all of your monthly expenses and save some money each month as well. If you don't have any sort of savings, it's not a good idea to move out on your own. Save up a little bit so you have a cushion for emergencies and unexpected events.
What if your roommates or partner moves out so you need to adjust your budget to reflect no longer splitting known expenses?
If your roommate moves out, it's important that you figure out what expenses you'll be covering on your own and try to figure out a way to cut costs where possible. Living on your own means there are more bills to pay. Start adding up all the new costs you'll incur and make life changes where possible.
You can also try to get a job that pays better or find ways to cut your bills like getting cheaper cell phone service. Plan ahead for this unexpected change and make sure you have enough money saved up in case of emergencies like this.