Moving out of your parents’ house is an essential step in becoming independent as a young adult. It is a step that can become challenging for many young adults due to the costs involved and making important decisions.
However, despite the challenges, having your own space is an exciting thought for most people. This experience can be seamless if you follow the right steps and arm yourself with the necessary information.
In this post, I’ll explore the how much it costs to live on your own, common expenses when it comes to living alone, and what you can do to save money when the time comes to move out. Let’s get started!
How Much Does It Cost to Live on Your Own?
In this section, we’ll discuss the significant costs of moving out and the details. Before you move out, it is vital to make a list of the major expenses such as rent, utilities, groceries, and more. The costs of moving out will play a huge part in the choices you make, such as the type of apartment to rent or the size of your home.
Related: Cheapest Way to Live in 2021
Rent or Mortgage Cost
Rent or mortgage will take the most significant chunk of your budget when moving out and is one of the first things to consider when planning your move.
Depending on the city, the cost of renting an apartment will vary. To get an idea of the average cost of renting an apartment, if you’ll be renting one, you can check apartment listings on websites like Craigslist and Zillow. When looking to rent an apartment, a piece of common advice is to not spend more than 30% of your income on rent when possible.
The rent could cost hundreds or thousands of dollars, depending on your city’s cost of living. You may need to live with roommates for the time being if you live in a major city to save costs. It is also better to sign a one-year or two-year lease to help you stay as long as possible without an increase in rent.
If you’ll be paying a mortgage, consider a property with favorable rates. You can use a mortgage calculator to get an idea of the monthly payments and the total interest expenses.
Tips for Lowering Your Housing Costs
Because your rent or mortgage will likely be the largest portion of your monthly budget, many people will choose to limit these costs. Here are a few ideas to help lower your housing costs!
- Rent out a portion of your home
- Live in an area with a low cost of living
- Ensure your credit is in good shape to get the lowest interest rates
- Avoid PMI if possible by contributing a larger down payment
- Choose a smaller or less expensive home
When looking to rent an apartment, many landlords will require you to complete an application and undergo a screening process.
After this, you will pay an application fee that will cover the application processing and the background checks cost. If they approve your location, you’ll be asked to pay what is known as a security deposit.
A security deposit is a fee paid by new residents to the landlord or a property management company in addition to the advance rent payments. This deposit serves as a form of insurance to landlords against contract violations or unpredictable residents. This fee is kept in case the resident skips rent or damages the property.
The bright side is security deposits are refundable, once you keep to the terms of the contract. The amount to pay depends on the city or state. Some states have a required limit of one month’s rent or one and a half months in some states. Your credit score can also affect how much you’ll pay as a security deposit.
While landlords may cover most or some of the utilities in an apartment, owning a home is different. You may have to cover all the costs, including water, heat, and waste disposal, in some cases.
Other utilities include cable TV, internet, electricity, and gas. Utilities such as cable and internet have fixed rates most of the time but for others what you pay will vary depending on how much you use.
If utilities are included, you’ll want to consider this when comparing living arrangements.
The electricity bill will most likely cost more than other utilities and range from $40 to $200 or more depending on your usage and the apartment’s size. Air conditioning and heating in the summer and winter can cause a spike in the electricity bill, so you should be prepared for that. If you need some help saving money on utilities, check out my post on the cheapest ways to heat your home!
Another sneaky utility cost is hot water. Even if your water is included in the rent, the electricity used to heat the water can be costly.
When deciding how much you can afford when moving out, you’ll want to include each utility as it’s own line item on your budget.
Sometimes, you might be forced to pay a utility deposit if you have no credit, a low credit score, or no payment history. Assuming you make regular payments, this will be refunded if you ever decide to leave the city or disconnect your service.
When planning to move out, you shouldn’t forget to include moving expenses in your budget. After getting an apartment or finding a home, decide if it’s possible to move your belongings with the help of a few people or if you will need professional movers. Better still, you can transport small items yourself and hire movers to take care of the big stuff.
Renting a truck could cost around $20 for a small move within a city to more than $1,000 for longer distances. If you decide to hire professional movers, they’ll charge by the weight of the items to be moved and the distance.
Your moving expenses might include flights or cab rides to your destination. Also, you should make a budget for your everyday transportation after you move to the apartment.
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One of the advantages of living with your parents is not worrying about paying for your groceries. However, if you plan to move out and become independent, it’s time to start factoring in food costs.
Though groceries may not take a big chunk of your budget once you plan properly, it is a necessary expense. To reduce food costs, you can cook your own meals instead.
According to a USDA study, the average thrifty food budget for individuals is around $180 per month. It’s wise to budget about $200 or more for your groceries when moving out. Not sure how much you should be spending on groceries? Check out my guide on how much you should be spending on food!
Home Maintenance (If Purchasing a Home)
If you will be purchasing a home, then home maintenance costs are part of what you should consider and prepare for before moving out to your own place. It can be hard to determine the exact cost of home maintenance and how much maintenance your new home will need. However, you can make a rough estimate by considering factors such as the age of the home, the weather, the facilities, and the overall condition of the house.
A survey conducted by Home Advisor discovered that homeowners spend an average of $1,105 on annual maintenance. If you purchase a home that has just been built recently, the maintenance costs might be less as there is a reduced chance of having to maintain the major structural components. Also, if you purchase a home in an area where the temperature and humidity fluctuate a lot, you should increase your home maintenance budget.
Homeowners or Renter’s Insurance
Homeowners’ insurance will protect you from damages caused by fire, theft, or wind damage. If you are purchasing a home, then this will be part of the costs. You can get a free quote from many insurance agencies to give you an idea of how much to budget. Getting this is important as your mortgage lender may require you to buy a homeowners’ insurance policy.
However, if you’ll rent an apartment, then you’ll purchase a renter’s insurance policy. A renter’s insurance policy will protect you from damages caused by fire, theft, or other causes. This is also important as most landlords will not cover these and some will include getting a renter’s insurance as part of the requirements. You can get a renter’s insurance for a few hundred dollars per year.
The good news about furniture is that it is mostly a one-time expense on your budget. Most affordable apartments do not come with furnishings, so you’ll have to include this in your budget when you plan to live alone. One of the most important items to get is a comfortable bed. After that, you can purchase a couch, chairs, a dining table, and a TV stand, if you still have some money left.
To save money and spend less, you can get these at thrift stores or big-box stores. It isn’t necessary to have a fully-furnished apartment right from the start; you can start with the necessities and get more later if you have excess funds. However, if you’re renting a furnished apartment, then you do not have to worry about this, though it’ll reflect on the total rent cost.
Cutlery and Tableware
This is a minor expense but should still be included in your budget. If you’ll be cooking your food, which we’ll advise, you’ll need to get cutlery and tableware. You’ll need plates, cups, pans, and other utensils when moving to your place. You can get all these at low prices at Walmart or Target. Better still, your parents may be able to help you with some of them. You can get the necessary items first before getting more after you settle down. Luckily, you can get most of these items for less than $50 in total at a thrift store,
How to Move Out of Your Parents’ House at 18
Now that we have gone through the major costs of moving out, it’s time to consider the right steps you should take as you move out of your parents’ house and live alone.
Though moving out can be a lot of work, it’s important to make sure you are doing it the right way. One of the things you can do to prepare yourself is to pretend you are already living on your own. You can do this by offering to take care of some of the home bills and doing more cleaning and general maintenance.
In this section, we’ll look at the significant steps to take to prepare yourself for becoming independent and moving out of your parents’ house at 18.
Establish a Budget
The first step in moving out of your parents house is establishing a budget. The moving costs we have previously mentioned can serve as a template for your budget. A budget will keep you on track and help you set financial goals.
When you set a budget, it becomes easy to know if you’re ready to move out or financially incapable. A budget states your total income and your expenditure and will help you determine how to cut your expenses to save more money. Also, a budget can help you make essential choices, such as the type of apartment you can afford.
Let Them Know
Before moving out or before arranging the move, you should let your parents know your plans, far before you move out. Whether they are prepared to see you move out or want you to stay, you should clearly communicate your plans. This will help prepare them for your eventual departure and also prepare you in a way. When you inform them of your decision on time, they can help you draw concrete plans and provide help where they can. Communicating your intentions is a way of being sensitive to their feelings and needs.
Arrange the Move
Once you have created a budget and informed your parents about your intentions, the next step is to plan the move. Create a moving plan with a goal date and other major details. Your parents can help with this too and give you the extra motivation you need.
Practice Your Finances
This might sound crazy, but if you’re moving out at such a young age, it can be a great idea to see how your finances will align when living on your own. A few months before you plan to officially move, arrange an automatic transfer from your bank account into a savings account each month that is similar to the cost of living on your own.
For example, you might transfer $1,000 into your savings account each month to see how your finances line up. This will help you to get a good idea of the costs of living on your own and if it’s affordable for you.
Things to Know When Moving Out and Living On Your Own
When planning to move out of your parents’ house and living on your own, you should know some important things.
Can you afford to move out on your own, and can you pay your bills? This is the first thing to consider when planning a move. You should have enough money to cover rent and still have enough left to cover other expenses.
If you have an unstable income, average out your income over the course of the year to get a good idea of how much you can afford when living on your own.
2. Do you need a roommate?
If you live in a major city with high housing costs or a place where it’s hard to get an apartment, it might be better to live with a roommate, to help reduce specific expenses like your housing costs and utility bills.
3. Credit history
If you have not created a credit history, then it’s time to do so. You can apply for a low-interest credit card to help to build your credit score but this will take some time.
If you’re applying for a mortgage, you’ll want to have a strong credit score to get the best rates available and have a better chance of getting approved.
4. What else do you need?
Furnishings, tableware, and other items are part of what you’ll need. It is vital to cover all the bases before you move out. These costs can add up and without someone else living with you, you’ll be forced to cover the tab.
5. Hidden Costs to Live on Your Own
When moving out of your parents’ house, there might be many smaller things that they pay for that you might not think of. Items like toiletries, meals out, and various other purchasing might end up costing you more than you think. Be sure to allocate some of your money towards these hidden costs when moving out and living on your own.
Transportation costs can often be one of these hidden costs. When moving out you might be forced to use public transportation to save money. This will not only help you to reduce costs from fuel for your car, but also maintenance and car insurance.
Another common hidden expense is a cell phone bill. You might not think it would cost much money but when you live alone, but it can be a small chunk of your income.
6. Entertainment Expenses
When moving out, you’ll also want to keep in mind entertainment costs as these will likely go up. Spending more time with friends could come with a cost. There’s a good chance you’ll spend more money on entertainment when living alone.
How to Save Money When Living On Your Own
There are many different ways you can save money and cut expenses when moving out and living on your own. Because the cost to live on your own can be expensive, try to use these tips to spend less.
House Hack to Save on Rent
House hacking is an excellent way to save money when moving out. While you won’t technically be living on your own, it can help you to transition to living alone in the future.
Save on Groceries with Coupons & Cash Back
Your grocery expense will likely be one of your more costly monthly expenses, so it makes sense to try to save as much as possible. How?
By utilizing coupons you can save 10% to 20% on your grocery costs each month. On top of that, using a cash back credit card with bonus points on spending at the grocery can help you to save an additional 2% to 3%, great for those looking to save money when living on your own.
So, How Much Does it Cost to Live Alone?
Now that you’ve analyzed all of the costs to live alone, you probably noticed it won’t be cheap. Living on your own can can thousands of dollars each month depending on where you live and your lifestyle.
Final Thoughts on How Much It Costs to Live On Your Own
Moving out is a huge step for most young adults, but the process could be as easy as possible with enough planning.
Apart from the tips in this guide, one final advice is to always have a financial cushion before you move out. This can help to limit stress and play a huge part in determining how comfortable your transition will be.
When you move out of your parents house and live alone, it can be difficult to save money. Between the moving costs, your rent or mortgage, and other expenses, moving out is not cheap and it can cost anywhere from $500 to over $2,500 per month. You’ll want to ensure you have the funds available to keep your bills paid before making the decisions to move out and live on your own.
Have you moved out of your parents’ house? Comment your experience below!