Price of independence
Secondary headline (deck or summary): Are you ready to move out on your own? Consider these costs first.
Feeling ready to move out on your own and being ready are not necessarily the same thing. You may be eager to escape curfews and other house rules, but are you prepared to accept the financial responsibilities attached to this independence? Before you make this major life decision, Michigan State University Extension recommends conducting research to know what ‘the move” will cost.
You may be fortunate and have friends who are willing to physically move your belongings to your new home at no expense to you. If this is not the case, you need to get estimates on what it will cost to hire a moving company.
Not everyone who is living independently for the first time realizes that you may be required to pay your first and last month rent up front. This practice affords the landlord some protection in the event the renter leaves suddenly.
Another common practice involves collecting deposits for things such as security against property damages or cleaning the rental after you vacate. It is important to inquire exactly what additional cash monies will be required to move-in.
There can be additional one-time fees associated with activating your telephone and utilities.
Even if you have begged and borrowed every dish, pot and pan from friends and relatives you will more than likely have to make some purchases for your new home. Is your rental furnished? Do you have appliances? You should calculate the approximate amount of money needed to purchase the basic necessities.
Now that you’ve determined the initial costs of living independently you need to evaluate what your monthly costs will be. Paying your monthly bills, on time, is very important when living on your own. If you fall behind, the climb back from collection agencies and late fees can be very difficult. Have you considered these expenses?
- Utilities – Electricity, gas, water/sewer/garbage pickup, cable, internet
- Auto – this includes car payment, auto insurance and gas for the vehicle
- Credit card
Expect the unexpected
In a perfect world you could research exactly what your monthly expenses would be, and know exactly how much money you would need to earn to live on your own. Unfortunately, we do not live in a perfect world. You must be financially prepared for the unexpected flat tire or doctor’s visit. Building an emergency fund for the inevitable “unexpected” will factor into your financial independence.
MSU Extension and Michigan 4-H Youth Development offers trainings, articles and resources to help you decide if moving out is the right financial decision to make. For additional money management and consumer resources, try Financial Champions or Consumer Savvy, both National 4-H curriculums.