Safeload Coverage
For most people, there comes a time in life when you’re ready to move out from your current home. Whether you live on your own or live with roommates when you move out depends on multiple factors. Before you can move out, you might wonder, “How much money do you need to move out?”
Of course, everyone’s circumstances are different, but the factors to consider will be the same. Learn what you need to consider on how much money you need to save for yourself from the Moving Help® Marketplace to achieve this milestone.
TL; DR: You’ll need enough money to cover upfront costs — such as rent, security deposits, and moving expenses — and plan for ongoing lives expenses like groceries, utilities, insurance, and dining out. It’s recommended to have an emergency fund with three to sixth months of living expenses, but that dollar amount will depend on each person’s expenses.
Understanding the Total Costs of Moving out
The first step is figuring out initial costs associated with securing housing. You’ll need to decide whether you can:
You’ll most likely rent a place, so let’s discuss those initial costs. These costs include:
- First and last month’s rent
- Application fees
- Renter’s insurance
You’ll also need to consider the following potential utility bills:
- Electricity
- Water
- Gas
- Internet and cable
- Trash collection
- Sewage
You need to include groceries, eating out, entertainment, phone bill, and other living expenses as part of your new budget.
You also should be prepared for unexpected costs that might occur after your move. If it’s not one thing, it’s always another thing.
It’s always important to save money just in case for a rainy day. When you plan for an emergency, your emergency fund can help mitigate abrupt repairs.
Upfront Costs: Rents, Deposits, and Fees
When it comes to renting, you have several potential upfront costs. These costs could include:
- A security deposit and/or a cleaning deposit
- A pet deposit
- A key(s) deposit
- First month’s rent (some might require last month’s rent as well)
Keep in mind, that states — even landlords — might have different requirements or total amounts. Each state has different tenant laws and landlord laws on what a tenant can be charged from a landlord when it comes to security deposits. You can use your state’s resources to help you stay informed on the rules and regulations.
You’ll also need to consider utility setup costs and initial payments. You’ll want to set up your utilities after you find a place but before you move into your new home.
Monthly Budgeting: What to Expect
Before you answer the “How much should I save to move out” question, you need to make sure you know how to properly set a monthly budget for yourself.
It’s best to keep track of how much income you make each month and the total expenses you spend each month.
Housing Costs
To start, you need to figure out how to divide your money up. Most experts recommend not spending more than 30 percent of your gross monthly income on housing.
If you live in the 21st century and not the 20th century, you’ll understand that it’s more and more challenging these days.
That’s why some experts recommend the 50/30/20 budget rule.
This says you should spend 50 percent of your gross income on your needs, such as housing, 30 percent on your wants, like eating out, and 20 percent toward savings and debt repayment, such as putting money away in a savings account.
Most apartment complexes require you to earn 2 times, 2.5 times, or 3 times the amount of the rent. For example, if the apartment will cost $1,000, most places expect you to earn anywhere from $2,000 to $3,000 gross income per month.
Food and Grocery Costs
You’ll need to decide how much you want to estimate your food and grocery costs. The average annual cost of groceries is $6,053 yearly, which is about $504 per month, according to U.S. Bureau of Labor Statistics.
For a single person living on their own, it could cost you anywhere from $385-$445 per month. For two people, a budget could be between $705-$835 per month. For a family of four, it could cost you about $1,080-$1,640 per month, according to Instacart.
When it comes to eating out, Americans spend an average of $3,639 per year, which is about $300 each month, according to Ramsey Solutions.
You’ll need to take into account your eating habits and dietary preferences. You might prefer to have a larger budget for take out and dining at a restaurant vs. cooking for yourself at home. You also might prefer to cook more at home than to eat out. You’ll need to figure out what balance works for you and your budget.
Transportation
You also need to set aside funds for transportation and commuting. If you own a vehicle, you’ll need to account for gas and car maintenance. You also need to make sure you have car insurance, especially if someone hits you in a car accident — and worse — they take off and create a hit-and-run accident.
The total cost of car insurance can increase or decrease depending on where you live, how far you drive to and from work, how many miles you drive in a year, and previous driving history.
If you rely on public transit, you’ll need money for the bus or train.
Additionally, if you use a taxi, Uber, or Lyft, you’ll want to account for these expenses as well.
If you rely on public transit, you’ll need money for the bus or train.
Additionally, if you use a taxi, Uber, or Lyft, you’ll want to account for these expenses as well.
Additional Expenses to Plan for
Depending on your situation, you’ll need to consider additional expenses that could occur during your move or after you move. If you need moving help because your friends and family won’t help you, you can find affordable, professional moving labor from the Moving Help Marketplace.
Now let’s consider other expenses that come after moving.
Home Essentials and Furniture Purchases
Unless you already own furniture or can acquire hand-me-down furniture, you’ll need to purchase home essentials and furniture for your new place. You need the following items:
- Bed
- Couch/sofa
- Home essentials
- Kitchen essentials
- Decorations
- Cleaning supplies
Insurance Costs
You’ll need to think about three main insurance costs, especially if you’re getting a new job after you move out:
- Car insurance
- Renter’s insurance
- Health insurance coverage
Car insurance will protect you from car accidents, windshield cracks, etc. Renter’s insurance can protect you from fire and water damage along with theft. Health insurance will protect you from unexpected medial expenses while making sure you have adequate health coverage.
Emergency Funds
Finally, you’ll want to create an emergency fund for repairs and unforeseen emergencies. In fact, about 41 percent, or about 2 in 5 Americans, could pay for a major unexpected expense that costs $1,000 with their savings, according to Bankrate.
Instead, others would use a credit card, reduce spending, take out a personal loan, borrow money from friends and family, or another method.
When you have a financial cushion, sudden emergencies won’t derail your life or plans when it comes to money. Since you’re preparing for an emergency, you can handle these issues promptly.
3 Tips for Saving Money Before You Move out
If you’re not sure where to begin before starting the process of moving out, Moving Help has three tips to assist you with figuring out a game plan.
1. Creating a Realistic Savings Plan
The first step is to be honest with yourself. To create a realistic savings plan, you need to honestly examine where you spend your money. Nothing is wrong with spending money on eating out or entertainment and saving a little bit less than you’d like for your savings.
It just won’t be helpful for anyone if you “plan” to save $500 each month but only save about $300 to $400 each month.
Additionally, you’ll want to make sure you calculate all moving-related costs. You’ll want to make sure your expenses include:
- Rental vehicle or storage container (U-Haul truck rental, U-Box storage container, gas, etc.)
- Moving labor (When using Moving Help, the most common service is two helpers for two hours)
- Any deposits (such as a security deposit and/or cleaning deposit)
You can divide your total by the number of months before you want to move out. This will help determine how much money you need to save each month to reach your goal.
2. Cutting unnecessary Expenses
You also should consider cutting unnecessary expenses from your budget. You’ll need to take the time to review your current budget and spending habits. This will help you identify areas where you can reduce costs, such as cancellation subscriptions you no longer use or dining out less often.
You can significantly increase your savings and put more toward your moving budget.
3. Utilizing Budgeting Apps and Tools
To help streamline your savings efforts, you should take advantage of budgeting apps and tools. Everyone’s needs are different — from wanting to use a more automatic process to doing more manual work along with using different apps or an Excel spreadsheet — but what you need to focus on is using what works for you.
What works for you might not work for someone else. What makes sense to you might be complicated for someone else.
The main point is to stay consistent and keep on top of your budgeting apps and tools.
This will help you stay organized and keep a close eye on your finances, which will motivate you to ensure you’re on track to save enough money.
Preparing for the Transition: Lifestyle Changes
Moving out on your own is an exciting milestone, whether you’re going to live with roommates or on your own, but it also brings significant lifestyle changes that need careful preparation. “How much money do you need to move out?” is a question that everyone will need to answer individually.
Experts say to have emergency funds saved for three to six months. That could be $3,000-$6,000 for one individual, but it could be $9,000-$18,000 for another person.
You need to make sure you have a monthly budget set in place, understand your soon to be upfront costs, plan for additional expenses, ways to save money before moving out, and use a budget system that works for you.
“How much money should I save to move out?” will depend on your needs. Once you figure out your own needs, the process will become much easier to handle.
Speaking of needs, if moving heavy furniture in the hot Phoenix summers or in the cold Minneapolis winters sounds miserable to you, we have the solution for you.
Hire moving labor from the Moving Help Marketplace today for all your moving labor-related needs.
