Tips for building finances and getting a place of your own
It’s normal to need a soft place to land before you launch, and Mom and Dad’s basement might seem like the ideal place. According to Pew Research, as of 2020, a startling 52% of people in the U.S. ages 18 to 29 live with their parents—the highest percentage since the end of the Great Depression.
While the hot meals and cheap (or nonexistent) rent might be great, the goal for most people in this age group is getting out on their own, in their own space with their own schedules, lifestyle, and control of the remote.
But how do you pull that off, especially in a tough economy and a global pandemic? Moving out on your own is doable, but you need to have a plan. Here’s how to fasttrack your way out of your parents’ house and into your own place.
Do some research.
A site like Craigslist is an ideal place to get an idea of what the going rent is in areas you’d like to live, as well as give you a place to find people looking for roommates. You’ll need to get a realistic expectation of what options are out there and what they’ll cost.
You’ll have to think about priorities and what you’re willing to compromise—is it more important to live in the cool but expensive neighborhood near shops and bars, or to have a larger and more affordable space somewhere less trendy? Are you willing to share with a roommate or are you set on having your privacy?
Create a budget.
Once you get a sense of the going rents, you’ll need to take a look at what you’re spending now, as well as what you will be spending each month once you move out. You need to account for more than rent. Here’s a checklist:
- Rent
- Utilities
- Cable, wifi
- Phone
- Food/groceries
- Gas/car
- Insurance: renters, health, car
You’ll also need to budget for moving expenses, such as:
- Renting a truck or hiring movers
- First/last month’s rent and deposit, which you’ll need before you move in
- Furniture and household items such as bed, table, kitchenware, bedding, TV
Find your why.
A powerful way to follow through on a goal is to find the “why,” or the reason you want to move out. Is it because you’ll feel more adult? Will it improve your relationship with your parents? You’re dying to move to a cool new location and start a life of your own? You love decorating and can’t wait to create a beautiful space that’s a reflection of you? Whatever your reason, finding your why will help you stay motivated and stick to your goals by reminding you of the deeper reason this decision matters to you.
Create a timeline.
If you want to move out in six months and you have a sense of how much money you need to save, you can calculate your monthly savings goal. Having a timeline helps you stay motivated and track your progress. You can even break your savings goals down into smaller chunks, like how much money you need to put aside daily or weekly, to help get your brain on board.
Start saving.
To make sure that once you move out you can afford to STAY in your place, you should aim to save for about three month’s living expenses in addition to your moving expenses.
This cushion will make sure you don’t end up running out of money or needing to break your lease and move back home—which can mean losing your deposit.
One of the best ways to do this is to set up a personal savings account specifically for your saving’s goal.
A personal savings account can help keep that money safe and out of sight, out of mind so you can better stick to your goals. One of the most powerful hacks for savings is to pay yourself first, and make it automatic. So when your paycheck lands in your checking account, set up an automatic transfer of funds to your savings account so that money goes straight to your goal.
Another way to save is using a round-up tool on your debit card that rounds up to the nearest dollar for every purchase you make, sending that “spare change” to an interest-bearing savings account.