How To Survive Moving Out On Your Own

If you are feeling jittery about financial independence, here's an essential guide to ensure you are well prepared for the process.

22:40 08 April 2020

Moving out on your own is an exciting milestone for any young adult. Along with freedom comes lots of responsibility, though.

Set up a budget

Budgeting is an essential money management strategy that helps you track your money. It helps you plan your daily or monthly expenses so that you can live within your means.

Here are handy budgeting tips:

• Use Technology: Most people use spreadsheets to keep track of their monthly payments. If you would prefer that your budget is always easily accessible, you can try mobile phone apps, which have templates and formulas that make everything easy to calculate.
  
  
• Make a list of Recurring Bills: Note down every bill that you pay weekly, bi-weekly, monthly, or quarterly, including the due dates. Some of the usual bills are rent, electricity, gas, water, and the internet, for example.
  
  
• Budget for Savings: It is the best time to build a savings culture. Set aside a part of your income for emergencies, such as losing your job, or major life events, such as a wedding.
  
  
• Budget for Debt Repayment: If you have student loans, a car loan, or credit card debt, you should factor these repayments into your monthly budget.
  
  
• Seek Information: Try seeking out information on how you can leverage your resources to improve your finances. You can ask your bank, your parents, community centers, or even use online resources. Your new neighbors and local businesses can also help you with tips for the best electricity rates or places that are hiring in the neighborhood.
  
  

Learn About Credit

Credit scores help creditors assess how much of a risk it is to lend you money. A good credit score can help secure loans to buy or lease a car, a house, or access credit cards for convenience.

Credit scores are calculated based on payment history, how much you currently owe, how long you have been paying bills, among many other factors. The more history you have, the more information there is to draw on for the authorities.

Some simple ways to build your credit score are:

• Pay Utility Bills: As part of your moving preparation, build up your credit history by putting a couple of bills into your name, such as the phone or cable bill. Ensure you pay all bills on time as proof that you are responsible enough to pay off your debt.
  
  
• Sign Up for a Credit Card: It may fly in the face of all the advice you have heard so far, but a new credit card is a quick way to create a good credit history if you manage it well. Use the card to pay essential expenses only, such as your mobile phone bill. Ensure you make the monthly minimum payment to improve your score—default will only hurt your credit history.
  
  
• Pay off existing loans: Student loans are the biggest culprits in low credit scores among young adults. Sacrifice luxuries and pay off these loans diligently. You will build the kind of credit score you'll need to make more prominent purchases later in life.

Simple Ways To Save Money

Saving money is a significant aspect of the moving checklist. Some quick money-saving hacks you can try are:

• Eat at Home: Eating out is fun and convenient, but if it is a daily affair, it adds up quickly. Save money by cooking at home, packing a sandwich for lunch, or even skipping Starbucks and brewing coffee in your own kitchen.
  
  
• Don't Pay More: When you have limited income, your expense list must include cheaper alternatives. Shop around for more reasonable electricity, internet, and mobile phone service providers. Buy things offseason and shop at discount stores—every penny saved counts.
  
  
• Limit Credit Card Use: Credit cards enable you to spend money that you don't have and force you to pay interest for this kind of impulse buying. Keep your credit card for emergencies only or use it to pay bills.
  
  
• Save before Spending: Saving takes lots of discipline. The easiest method is automating your saving installment by having it deducted directly from your checking account.
  
  
• Share Expenses: If you have roommates, it is easier to save on bills and rent. Even if you are living alone, though, you can save on expenses, such as cab fare, meals, and subscription accounts like Netflix, by splitting costs with a friend.
  
  

Whether it's finding an apartment with no deposit electricity, dining in, cancelling subscriptions or skipping the bar-hopping, finding ways to spend less will only make your moving experience smoother. Good luck!