We were once Empty-Nesters until my youngest ran into financial trouble and had to return home. He had lost his job, used the last of his income and savings to pay rent. He also acquired more than $20,000 in credit card and student loan debt. After 3 years he has paid off his debt and has begun to save. As he begins to build his emergency fund again, we were advised by my son “I can’t afford to move out.” I want to save at least $10,000. However, will this be enough? Let’s look at no money to move out, versus $10,000 and $20,000 saved to move out.
Is It Possible to Move Out with No Money Saved?
This is highly unlikely unless you have friends or family willing to put you up until you get on your feet. This may be a solution to getting out of your parents’ home. However, you basically couch hopping. This may work for a while with sympathetic friends or relatives. Needless to say, after a while, if you don’t have a plan for obtaining an apartment this will get old really quick. Therefore, I suggest you stay where you are and develop a plan to move out. The plan should include having a job, a budget, savings goals with a targeted move-out date because you can’t afford to move out without these essentials.
Is $10,000 Saved Enough to Move Out?
It all depends on your living expenses and the amount of debt you will bring along with your newly acquired freedom. It all starts with a budget, realistic expectations, and your ability to manage your finances. Once your budget is set you have to determine if $10,000 is enough to cover 3 to 6 months or 12 months of expenses.
If you are relocating and need to also find a new job, $10,000 may not be enough to move out. Especially, if you are bringing along old debt and expenses. If you have done your research, have a good job prospect lined up with few expenses, then it could be enough. But it will also depend on your targeted location. Hence, if you anticipate that it will take a while to secure a job, I would suggest maybe you save more. Maybe 6 to 9 or even 12 months of living expenses. Also, have a good support system with a contingency plan should a job opportunity not pan out. However, if you are moving with a job and little or no expenses then $10,000 should be more than enough.
Would $20,000 Saved be Better to Move Out?
Of course, it would. $20,000 is a lot of money. Depending on your current expenses and location this money could last anywhere from 5 to 10 months. This amount of money should give you more than enough time to find a job if you don’t have one when you move. Nevertheless, keep some of the money in reserve at a high-interest bank and/or invest some of your funds. Always have a contingency plan should your plans unravel. Remember life does happen. Again, if you are moving with a job then you are good to go. Let’s now review what you should personally save to move out.
How Much Should You save Before You Move Out?
This depends on the cost of rent and other expenses for your desired location. If moving to New York from South Carolina like my son plans, he can expect the cost of living to increase by 96%. Use this handy cost of living calculator to calculate your desired location cost of living. Based on this information, needless to say, he is currently considering locations outside of the New York City area and will need to save more than $10,000.
There are more affordable locations in the boroughs, upstate, or nearby New Jersey that will help him keep costs down. He will probably have to include commuting costs in his budget if he lives outside of the city. Hopefully, armed with this information he can change his “I can’t afford to move out” to “yes, I can”. Use the handy calculator mentioned above to determine if you will need to add or subtract from your budget based on your targeted location. Research the cost of rent, cost to commute to work, and any additional costs unique to the area such as car taxes, entertainment, etc.
How to Set Up A I Can’t Afford To Move Out Budget?
Prior to my son moving out in 2015, we set up a “Cost of Living on My Own” budget. We researched rentals in the area, estimated the cost of utilities, insurance, car note, moving expenses, and other personal expenses. Then we took all the costs associated with the apartment and created an auto transfer for these expenses into a dedicated savings account. This served two objectives. First, you are saving to move out. Second, you are establishing the discipline needed to live off of what is left over after household expenses are paid. If you can live 6 to 12 months like this you are capable of affording your new lifestyle.
How Long will It Take to Save Enough To Move Out?
This depends on how much you currently make. What are your current expenses? How committed you are to staying on budget? Finally, if you have a good support system that will allow you to live rent-free or at a low-cost rent while you shore up your savings. You should start with a targeted date and savings amount and create your budget based on that date. Planning to move within 6 months is a well-targeted date.
You should be able to save 3 to 6 months of living expenses within that time frame. Nonetheless, life happens and unexpected expenses can occur. If you can extend the timeframe to 12 months you should. However, it is up to you and your current circumstances. I suggest unless your current living arraignments are not ideal you should take all the time you need. It is always better to be prepared for the worst-case scenario. i.e., car trouble, doctor expenses than to be caught unprepared.
Can You Afford Or Want To Live Alone?
Living alone requires a certain level of maturity that requires you to be totally responsible for maintaining yourself and your household. You can mediate this by doing your due diligence by assessing the location you want to move to. Is it affordable on your current income? Would you need a second job to make ends meet? Is a roommate a possibility for you?
My oldest son had difficulties sharing a dorm, so a roommate is a no-go. However, this may be an ideal arraignment for my younger son. He is more of a social butterfly and is very open to sharing an apartment with a close friend or a friend of a friend. Sharing the cost of an apartment could be ideal for him as long as he has his own personal space and is cool with the other person. Paying half the cost of an $1800/month apartment is much easier than paying all the costs alone, so you have no reasons to say I can’t afford to move out.
Again, let me reiterate, roommates can help shoulder some of the financial burdens that you may not be used to handling alone for the first time. This may help with having to rely on your emergency fund should you become less disciplined in your spending. It can also provide a little bit of accountability. There will be no Mom and Dad to check on you to make sure you are meeting all your responsibilities. Avoiding the “The mouse will play when the cat is away” mentality. Besides accountability buddies are a good thing and are a great way to help you afford to move out.
Are You Mentally Ready To Move Out On Your Own?
If you grew up in a big family where chaos ensued, then this may not be the ideal arraignment for you. Living alone can be lonely especially at night when most families meet up to share about their day. A good friend or relative may help with the transition of being alone for the first time. They can help you stay grounded by providing a new sense of family and/or community. Also, call and visit home frequently. There is nothing more comforting than hearing the voice of Mom and Dad or visiting them whenever you can. This brings us to our final checklist and tips to help you avoid the “I can’t afford to move out attitude”.
Check The Rental Qualifications Before You Move Out
While researching for your new digs. Be sure to find out what are the qualifications to rent the apartment. Is there an income criterion that you must meet? Do you need a certain credit score to be able to rent? Many landlords and property managers check credit. Read Nerd Wallet article on credit checks. The last time we had to rent prior to moving into our home our credit score determined that we did not need to leave a deposit. As long as we had renter’s insurance, we were good. This was significantly cheaper than paying 1 month’s rent and 1 month’s security deposit to rent the apartment for 6 months. Read here for more information regarding renters’ insurance per Nerd Wallet.
Your first or second time moving out should be a very exciting time for you. However, making sure you can afford your new home and are comfortable with the added expenses can be made easier. Use these 10 tips to avoid the I can’t afford to move out syndrome.
- Research the location of your new home and expenses i.e., rent, utilities, moving expenses
- Gather all of your income and current expenses and new expenses
- Create a budget and savings plan
- Determine if you can do this on your own or will need a roommate
- Find out the rental requirements
- Check your credit score
- Check on the need and cost of Renter’s Insurance
- Set a target move out date
- Stick to your budget
- Develop and maintain your support system
Let’s Budget, Spend, and Live!