Ready to strike out on your own? For most of us, true independence means moving out of our parents’ home and into our very own place. You may get an efficiency or one-bedroom apartment for yourself or find a place to share with roommates. Whatever you choose, you probably know it won’t be as cheap as living at home.
Before you begin looking for your new place, it’s important to figure out what you can afford. Here are the costs you’ll need to consider:
- Rent. This will be a big chunk of your budget. How big depends on the situation you choose. But rent is only part of the picture.
- Security deposit. This is a payment you give your landlord before moving in to cover any damages you cause during your tenancy. It’s refundable if no damage occurs. Some landlords don’t require a security deposit, but instead ask you to pay the first and final month’s rent before you move in.
- Utilities. Does your landlord pay heat, electricity, and water? Or are you responsible for these expenses? Your landlord or local utility companies can tell you how much past bills have been. Count on paying for your own phone, internet, and cable.
- Utility deposits and hookup charges. Some utility companies will ask you to put down a deposit to assure you don’t skip out and leave bills unpaid. Check when and how you get the deposit back. Hookup charges are fees for connecting you to the service and are nonrefundable.
And we haven’t even talked about furnishings, moving expenses, and rental insurance, which can easily add hundreds of dollars to the tab. As you can see, you’ll need a large amount of cash to get set up. Then you have ongoing monthly obligations that you should always pay on time.
To figure out all your expenses, create a budget sheet. Click here for more on how to setup a budget. Compare your monthly income with your estimated monthly expenses. Keep these expenses to one-third or less of your monthly income. If it looks like your income can’t cover all of them easily each month, consider a place with a lower rent. This way you will avoid turning your new haven of independence into a burden.
If you need help creating your budget or would like a modest loan to get started in your new place, talk to the friendly folks at Coosa Valley Credit Union.