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Tuesday, September 20, 2016

What to Expect when Living on Your Own for the First Time

I moved out of the house and became fully self supporting, other than health insurance, when I was 17. It was a rough transition, and though I was managing well at first, I made a lot of mistakes, and there were lots of things that I just got lucky with, so I didn't get into too much trouble, but even so, I ended up needing to be bailed out by my dad once during that first year. For those frugal minded folk who are considering moving out and being self supporting for the first time, who want to make a budget, here's a post written by one of this blog's readers, about expenses to consider and check out when building a budget for your new home.

The prospect of moving out and beginning life on your own can be exciting. It can also be daunting if you think of all the expenses you’ll have to face once you sign that lease agreement.

A 2015 report by the US Census Bureau indicated that the median annual income for households in the US fell by 1.5 percent in 2014. While it may not seem like much, it does indicate that the cost of living is going up while household income isn’t. Chances are that you may struggle to keep up with the expenses of living on your own if you’re not careful about your finances.

Understanding the different expenses one encounters when renting is important if you’re planning to go out on your own. This guide will give you a better understanding of expenses to expect and where you can cut costs and save money.


The true cost of renting
There are more costs to renting than many people realize. Be sure to include the following in your budget.

1. Rent
The amount you pay as rent every month largely depends on your landlord’s benevolence. Staying in your landlord’s good graces will therefore help you avoid problems with your landlord that may cause them to raise your rent or charge other fees. The best way to keep a good relationship with your landlord is by paying your rent on time every month.

2. Utilities
You can’t expect to live in your home without making use of utilities such as gas and electricity. Be sure to pay your bills in time to avoid penalties and disconnection.
You can save money by investing in energy efficient appliances and equipment. Be sure that there are unpaid bills by checking with the provider for your account’s information. This will help you avoid confusion as well as the extra costs of updating your account.

3. Renter’s insurance
While over 90 percent of homeowners have homeowners insurance, less than 40 percent of renters have renters insurance. Many renters don’t realize that their landlord’s insurance only covers damage to the structure. Renter’s insurance is essential if you want to protect your property in the case of damage or loss from flood, fire, theft and other disasters.

Renters insurance isn’t expensive. It can cost as little as $12 a month. What’s more, there are several online tools you can use to compare renters insurance.

4. Parking
If you have car and need parking space, you may be charged a fee for using the apartment buildings parking. It is important to find out if your landlord offers free parking. Many residential areas have limited parking space. You may therefore have to park on the street. This requires a parking permit which costs money.

5. Groceries
You have to eat to live. You’ll also need other items for comfort such as clothes and other personal effects. You’ll need to factor these into your monthly costs.
Although groceries are a necessary expense, there is a lot you can do to cut down your monthly expenses. Start cooking your own meals from scratch and carry packed lunches to save money on food. Purchase items that are good quality and durable to save money in the long term.

6. Furniture
If you’re like most people moving out for the first time, you probably don’t have any of your own furniture. Some landlords provide a few pieces of furniture to their tenants. However, in order to make your apartment a home, you’ll have to invest in some of your own pieces.

Purchase for durability to avoid having to replace pieces any time soon. Search online or in thrift stores for second-hand pieces in good condition.

It can be nerve-wracking moving out on your own for the first time. Understanding the expenses that you’re likely to experience will help you cope with them better.

See my disclaimer.

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