Another “Ask Rachel” today! One reader asks:
Hi!! Do you have any advice for moving out for the first time?? I'm in my twenties and living on my own is something I desperately want and need to do, but it really seems impossible. Thanks so much in advance!!
Ahh moving out for the first time is so exciting! Honestly, I was “eased” out since I lived alone for school, then when I moved back home I spent the majority of time at a boyfriends, then with friends, then again with a boyfriend. It wasn't until I was 24 that I started actually paying anyone rent and it wasn't until 26 that I actually had my name on a lease! With that said, my odd living arrangements for the majority of my twenties taught me a lot about finances and things.
8 tips for moving out on your own in your 20s:
Create A Budget
First things first, let's figure out what you can afford and make sure you'll be able to live comfortably on your own. Generally I like the 50/20/30 rule. Where 50% of your net income goes towards essentials. That includes rent, utilities, insurances, groceries etc. Next, 20% goes towards financial goals like paying off debt, saving for retirement, etc. Lastly, 30% goes towards your lifestyle, like gym memberships, meals out, entertainment, etc.
The percentages are a good rule of thumb, but not perfect for every situation. Keep in mind you can flex the percentages for your unique situation. For example, if you have a lot of debt, you may choose to put 30% towards goals and 20% towards lifestyle.
Get Clear On What You'll Be Responsible For
Moving out on your own gives way to a whole new world of expenses you may not have thought about. Obviously it's going to be expensive. Make sure you have enough for first and last month's rent, as well as a security deposit (be prepared for it to be one months rent, it may be less but that's the most it'll be). If you have a pet, make sure you're prepared for a pet deposit fee as well.
While looking at places, make sure you understand what you're responsible for:
Electricity: Your responsibility
Water & Sewage: Sometimes it's included in rent in apartment buildings other times it's not.
Internet: Your responsibility
Cable: Some apartment buildings give basic cable for free others don't. You may opt out of cable and just stick with a Netflix or Hulu subscription, but factor in what this will cost you monthly.
Parking: Again, for apartment living, are you given a space? Do you have to pay to put your car in a garage?
Landscaping: Covered in apartments and town homes. But if moving into a traditional home, make sure you understand who is responsible for mowing the lawn.
Renter's Insurance: Some places will require it. Good thing is you can get it for as little as $10 a month. Make sure you understand the plan though!
Personally, I wouldn't move out on my own, unless I tallied all of the above, plus an extra $1,000 in an emergency fund to cover anything unexpected. I know that may sound a bit extreme, but could you imagine shelling out all the money to live on your own, then get a flat tire? Or end up in the hospital? You don't want an emergency to wipe you out where you can't keep paying for that apartment!
Understand the application process
You'll have to pay for a background check, credit check, and sometimes a misc application processing fee to the HOA. If you move forward with a place, you should have your credit scores and pay stubs ready to go. A lot of times landlords want to know you have a steady job paying you enough to cover the rent. You can find some chill landlords on Craiglist who won't hit you with applications or fees, but it's not common or often.
Typically this all costs around $100 per person, but can be as much as $250 depending on the place. With that said, before you plop down your cash, make sure you'll be approved! Know what your credit score is, and if there are any minimum requirements in order to rent. If there is anything that could disqualify you in your background check, get ahead of it by letting your potential landlord know. Often times they won't care, but the community may have an HOA or board to answer too who will have to approve you.
Roommates or no roommates?
Pros: Others can offset your costs with rent, utilities, internet, furnishing, etc. They may help out around the house with chores. Could be lifelong friends.
Cons: You're not really on your own, they could be messy and annoying AF
Subleasing or leasing?
A lot of places won't allow for subleasing, but it can be a great way to get your feet wet.
Pros: Often times these places are pre-furnished and cheaper (you may have to negotiate) than a normal lease since every month this place sits empty, the original leaser is eating the cost. You may not have traditional application fees and some may not have you sign a rental agreement. Since you're picking up someone's lease midway, it's often shorter term which can give you a taste and allow you sometime to figure out your next move.
Cons: Some might not have you sign a rental agreement! Like I said, subleasing isn't always allowed in a building, but people still do it. Which means you have the chance of getting found out and kicked out without a formal agreement in place. Every state has different rules and regulations so just make sure you understand the ramifications and situation you are getting yourself into! Also, like I mentioned, it's often a shorter term arrangement, meaning you may have to go through the process of finding a new place sooner than you'd like.
Location, Location, Location.
I've always chosen to live in downtown areas where I don't need a car to get to my essentials (the beach and grocery stores). Not having a car allows me to put some of the money I'd spend on insurance, gas and other payments into my home. For others, that might mean having a car, but being closer to work so you can save money on gas and time with your commute. If you're leasing your car, keep the mileage of your commute in mind! You don't want to get hit with unexpected overage fees at the end of your auto lease.
Furnished or Unfurnished?
Until this most recent move at 27, the majority of my 20s were spent in pre-furnished places! Which meant that a lot of the places never really felt like a home. Honestly, it didn't bother me that much, since I got to save a ton of money and moving was always easy. Some landlords will charge more if they are renting with furniture, others won't. I got really lucky with 2 furnished apartments on Craigslist that were actually cheaper than unfurnished units in the same building. Sometimes you won't find that but it's something to consider. If you are moving somewhere unfurnished, expected to spend about $1000-2000 (conservatively) on furniture and things (bed, bed frame, couch, linens, kitchenware, etc. add up fast!).
Cut Initial Home Goods Costs:
Skip paper and plastic plates and silverware. It may seem “cheaper” up front, but it'll add up fast and creates unnecessary waste. Instead go to Target, they have a great 4 piece dish set for $20 in their “room essentials” collection or you can buy 1-2 plates and bowls for $1-2 per piece. Just hand wash it after each use. It'll keep dishes out of the sink and it's better for the environment. The same goes with silverware, you can hit up a Goodwill and just pick up 1-2 pieces of what you need.
Ask your Facebook friends.
People are always moving so they have may stuff they were donating anyways.
Check out this post on tips for selecting a mattress. Also, check our local Habitat for Humanity and GoodWill. With the growing number of “bed in a box” companies (who have forgiving return policies) countless brand new mattresses are ending up there!
Check Craigslist, OfferUp, Ebay, thrift stores, and the like obviously. However, make sure you understand prices! Don't just assume that it's used so it's cheaper. I can't tell you how many times I see used items being sold at those places for the same prices of $5 less than buying the item new! Check Amazon and Jet and install the Chrome plugin Wikibuy to make sure you're getting the best prices.
The biggest thing, is just make sure you understand the responsibility you're taking on and that you have an emergency fund in place before you move.