Moving Out For The First Time

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 Are you moving to your first apartment or home soon? Congratulations! We know how exciting moving can be. However, before you pack up the boxes, make sure you are financially ready to move. We have some information that is great for first time renters. This will help make sure you are financially ready for the next phase of your life. You can learn more at moneycrashers. 

1. Educate Yourself on Living Expenses

Living on your own involves more than paying rent or a mortgage each month. Water, electricity, gas, cable, and phone services are just a handful of expenses you may not immediately think of when contemplating the big move.In addition, you need to consider renters' insurance, security deposits, grocery shopping, and association fees – plus personal expenses, such as student loans, auto loans, and any credit card debt you may have built up in college. If you're not accustomed to paying your own way and don't sufficiently educate yourself on the costs of living alone, you may find yourself biting off more than you can chew.

2. Set Up a Budget

While you're still living at home, make an effort to familiarize yourself with common household expenses. How much do your parents pay for utility services every month? How about groceries, transportation, and cable? Your own expenses may be lower if you move into a smaller home and have only yourself to provide for, but this can still provide a valuable basis for an estimate.When you have all these numbers in hand, write out a prospective personal budget for yourself to get a better sense of what you can afford on your own. Determine how much income you're going to need for various insurances, gasoline, food, and other personal expenses. Are you going to have to start making additional payments, such as student loan payments, or are you going to need to buy or lease a car? When you answer all these questions and have all the appropriate numbers in hand, you can get a better sense of what you're going to be able to afford.Next, set out to find an apartment. Compare average rents of different neighborhoods, and view a wide sampling of apartments, considering factors such as square footage, light, views, safety, and convenience. Weigh the cost of rent plus associated fees against your take-home pay. Once you've done this, you're going to know whether you're ready to make the leap.

3. Pay Rent to Your Parents

Adjusting to life on your own is difficult if you've never paid a bill. If your parents are generous and don't ask for rent, consider yourself lucky – but realize that this will not prepare you for the real world. Therefore, offer to contribute. If your parents refuse to accept a rent check, offer to pay your own auto insurance, or give them money toward utilities or cable.By assuming responsibilities one at a time while still living at home, you can slowly acclimate yourself to financial independence. And if your parents won't take any money from you, put what you would have given them toward your savings. You can eventually use this money for a security deposit and first and last months' rent for your own home.

4. Build an Emergency Cushion

When bearing the burden of all household expenses on your own, disposable income can quickly become a thing of the past, and saving money is nearly impossible – at least in the beginning. While you still have a surplus income, put it toward a high-yield savings account to help your money grow at a quicker rate. If you contribute 10% of your paycheck each month, you can build up a nice cushion to rely on in case you lose a job, incur a medical expense, or encounter some other unexpected financial burden.Remember, if you want true independence, you can't rely on your parents as a safety net – you have to create one for yourself.

5. Pay Off Debt

If you're not careful, debt can hinder your financial growth for years. Use your time at mom and dad's to pay yours off – paying particular attention to high-interest debt, such as your credit cards – and resolve not to venture out on your own until that weight is cut loose. For lower-interest debts such as student loans, it's okay to pay the minimum for a while as you establish yourself (and pay off higher debt). Chances are your student loan interest rate is just slightly higher than inflation and therefore not costing you much to maintain.It's a lot easier to eliminate debt when you have only a few monthly expenses, so do as much as you can before you're on your own.

6. Establish a Credit History

Getting an apartment with no credit history can be challenging, and landlords frequently ask that parents cosign a lease for first-time tenants. However, you can avoid this roadblock by establishing a credit history before moving out on your own. Apply for a secured credit card or a retail charge card, which can be easy with no credit history. Make a charge, pay it off immediately, and then pocket the card. Then, unless you've proven to yourself that you're 100% financially responsible, don't touch it – a card in good standing is enough to establish good credit. You can also take out a federal student loan and make timely payments on it to slowly build a good credit score.
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