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How to afford living alone

How to afford living alone

No more roommates, no noisy neighbors, and after a busy day, you know exactly what you’re coming home to. 

For most people, living alone sounds like a dream come true. But the harsh reality is that it can be expensive, and unless you’re earning a pretty penny, it can be tough to make ends meet.

According to a 2022 report, the median rent for a one-bedroom apartment in the U.S. is $1,129. And if you want to live in a major city like New York or San Francisco, you can expect to pay upwards of $3,000+ per month.

In addition to rent, you’ll also have to factor in the cost of utilities, groceries, and other essentials. The average American spends about $370.16 per month on utilities, which can jump to $400 or more if you live in a large home or have a high-end lifestyle. Also, groceries can cost anywhere from $268 to $453 per month, depending on your diet and eating habits.

If you’re not careful, the costs of living alone can quickly spiral out of control. But don’t let that scare you from taking the plunge! With a bit of planning and some creative thinking, you can make living alone work for you—without breaking the bank.

Five reasons why living alone can be good for you

Between work, family, and social obligations, it can be tough to find time for yourself. But when you live alone, you finally have the opportunity to focus on your own needs and do the things that make you happy.

In addition to giving you some much-needed “me time,” living solo can also offer several other benefits:

1. You can save money

If you live with roommates or a partner, you’re probably used to splitting the cost of rent and utilities. But when you live alone, you’re responsible for the entire bill. While this may seem like a lot of money initially, it can be a great way to save in the long run.

Since you’re only responsible for your own expenses, you can cut back on unnecessary spending and put more money into savings. And if you’re really disciplined, you can use your extra cash to pay off debt or build up an emergency fund.

2. You can have more control over your environment

As much as you might love your roommates or partner, sharing a living space is not always easy. From disagreements over the thermostat to arguments about messy dishes, living with someone else can be challenging.

When you live alone, you have complete control over your environment. You can decorate your home however you want, keep it as clean or messy as you please, and make all the noise you wish to—without worrying about disturbing your roommates.

3. You can enjoy more privacy

Privacy is a luxury that’s often hard to come by, especially if you live with roommates or family members. We all need a little time to ourselves, and flying solo gives you the chance to unwind and relax in your own space.

You can take a long bath, read your favorite book, or watch TV without feeling guilty about taking up too much space or making too much noise. And when you’re ready for company, you can invite friends over without having to coordinate schedules or worry about someone else’s mess.

4. You can learn to be independent

The idea of going solo can be scary—but empowering. You’ll learn to rely on yourself more, and as a result, you may find that you’re more capable than you ever thought possible.

From fixing a leaky faucet to paying your bills on time, going solo can help you develop the skills you need to be a responsible and independent adult. And if you ever find yourself in a bind, you’ll know you can always count on yourself to get through it.

5. You can focus on your own happiness

In a world that’s constantly moving, it can be hard to slow down and focus on your own emotions. But when you live alone, you can make your own rules and do what makes you happy—without having to consider someone else’s needs or feelings.

What are the hidden costs of living alone?

While there are many benefits to living alone, there are also some hidden costs that you should be aware of before deciding to go solo.

Ongoing costs:

1. Rent:

Unless you own your own home, you’ll need to pay rent. And if you live in a city, chances are you’ll be paying more than your suburban or rural counterparts. The average rent for an apartment in Boston, for example, is $3,634—more than double the national average.

2. Utilities:

In addition to rent, you’ll also be responsible for paying your own utilities, which can add up quickly. The average monthly cost of utilities—including electricity, gas, water, internet, and cable—is $370. But in some states, like California, the average monthly cost is closer to $400.

3. Food:

Eating out all the time can get expensive, so you’ll need to plan for groceries. With the average person spending about $354 per month on food, that’s an additional $4,248 you’ll need to spend each year.

4. Insurance:

Renter’s insurance is a great way to protect your belongings in case of theft, damage, or natural disaster. The average renter’s insurance policy costs about $174 per year or $15 per month.

5. Other living expenses:

Gym memberships, phone bills, transportation costs, streaming subscriptions, pet costs—the list goes on and on. And when you live alone, you’re the only one responsible for footing the bill.

Upfront expenses:

1. Moving costs:

If you’re moving into a new place, you’ll need to factor in the cost of renting a truck or hiring movers. And if you’re moving to a new city, you may also need to pay for things like storage fees and plane tickets.

2. Deposits:

Most landlords require a security deposit, which is typically equal to one month’s rent. You may also need to pay a pet deposit if you have a furry friend.

3. Furniture:

We all want a touch of home, even if we’re living in a studio apartment. But furnishing an entire place can get expensive fast. A couch, coffee table, and TV stand can easily set you back a few thousand dollars.

So how much does it really cost to live alone?

The answer, of course, depends on a number of factors—like where you live, your lifestyle, and how much stuff you have. But if you’re looking for a ballpark estimate, the average person spends about $3,180 per month to live alone.

Eight tips to afford living alone

1. Learn the importance of money management:

Money management is key to affording any lifestyle—not just living alone. But when you’re solely responsible for your finances, it’s even more important to understand money management concepts like financial planning, goal setting, investing, and saving.

While there are several resources you can turn to for help, one of the best ways to learn about money management is to simply start practicing it. Track your spending, define your financial goals, and start working towards a more secure future.

There are a few ways to kickstart your money management:

Automate your finances: Setting up automatic payments for your rent, utilities, and other regular expenses can help you avoid late fees and keep your finances on track.

Cut back on unnecessary expenses: Take a close look at your spending and see where you can cut back. How often do you eat out? Do you really need that gym membership? Are there any other areas of your budget where you can save?

Evaluate your debt: If you have debt, take a close look at the interest rates and terms. Are there any ways you can consolidate or pay off your debt sooner? Yes? Great! No? Start looking for ways to earn extra income and put that towards your debt.

Build an emergency fund: An emergency fund is crucial to any financial plan. And when you’re living alone, it’s even more important to have a cushion in case of unexpected costs—like a job loss, medical emergency, or car repair.

2. Get creative with your living situation:

If the thought of shelling out $3,000+ per month to live alone gives you sticker shock, you’re not alone. In fact, one of the main reasons people choose to live with roommates is the high cost of living.

So what’s the solution? Get creative with your living situation.

You can look for an apartment with fewer amenities or choose a location that’s further from the city center. And if you’re really looking to save, you can even consider alternative living arrangements like house-sitting, RV living, or couch-surfing.

Of course, there are trade-offs to every decision—so it’s essential to weigh the pros and cons of each option before making a decision. But by thinking outside of renting a traditional apartment, you may find a place that’s more affordable and suits your needs.

3. Consider the cost of living in your area:

The cost of living varies widely from place to place. So, depending on where you live, living alone can be incredibly expensive—or surprisingly affordable.

Consider factors like the cost of housing, transportation, food, and utilities in your area. Also, be sure to factor in the cost of your chosen lifestyle. If you love to eat out and travel, those costs will add up quickly.

To get a better sense of the cost of living in your area, check out websites like Numbeo and Expatistan. These websites offer cost of living comparisons for cities all over the world.

4. Create a spending plan:

No matter how much (or how little) you earn, creating a spending plan is critical to affording any lifestyle—including living alone.

When you’re living alone, you have complete control over your finances. And while that may sound liberating, it also means you’re solely responsible for your financial well-being.

Find out how much you need to save before you move out. Then evaluate your income and expenses to devise a plan. 

It helps to answer questions like “how much do I bring in each month?” and “how much are my regular expenses (like rent, utilities, transportation, food, etc.)”? Once you have a clear picture of your cash flow, you can start making adjustments to ensure your spending aligns with your goals and values.

For example, if you want to save for a down payment on a house, you’ll need to ensure your spending doesn’t exceed your income. And if you’re looking to travel more, you may need to cut back on other expenses to free up cash for your travel fund.

The bottom line is that living alone gives you the freedom to choose how you want to spend your money. But with that freedom comes responsibility. So, be sure to create a spending plan that works for you.

5. Build your credit score:

Good or bad, your credit score plays a huge role in determining whether or not you can afford living alone. From qualifying for a mortgage to getting approved for a car loan, your credit score impacts your ability to borrow money—and, ultimately, your financial well-being.

Fortunately, there are a few things you can do to improve your credit score:

  • Paying your bills on time
  • Keeping your credit card balances low
  • Avoiding late payments
  • Limiting the number of hard inquiries on your credit report
  • Signing up for a credit monitoring service

6. Make extra money:

Thanks to the gig economy, there are more opportunities than ever to make extra money. And when you’re trying to afford living alone, every little bit helps.

So, consider picking up a part-time gig or two. You can drive for Uber or Lyft, walk dogs, or even start a side hustle:

  • Sell items you no longer need
  • Take on freelance work
  • Participate in online surveys
  • Do odd jobs for neighbors or friends
  • Start a YouTube channel
  • Blog
  • Affiliate marketing
  • Drop shipping
  • Drop servicing

Also, consider asking for a raise! If you’re already working full-time, there’s no harm in asking for a little extra cash. Just be sure to do your research and prepare a solid case for why you deserve it.

7. Move closer to work:

While living close to work may not be your ideal situation, it can save you a lot of money in the long run.

For starters, you’ll save on transportation costs. If you can walk or bike to work, you’ll eliminate the need for a car—or at least cut down on your monthly transportation expenses.

You’ll also save on time. The less time you spend commuting, the more time you’ll have to enjoy your free time—or make extra money with a side hustle.

And lastly, you’ll reduce your stress levels. According to the U.S. Census Bureau, the average commute time in the U.S. is 26.1 minutes. So, if you can avoid a long commute, you’ll likely be happier and less stressed.

As the saying goes, time is money—every minute counts when trying to afford living alone.

8. Make your home more energy-efficient:

One way to save money—and the environment—is to make your home more energy-efficient. By taking a few simple steps, you can lower your energy consumption (and your monthly bills).

Here are a few ideas to get you started:

  • Install energy-efficient light bulbs
  • Replace old appliances with energy-efficient models
  • Seal cracks and gaps around doors and windows
  • Add insulation to your attic and walls
  • Install a programmable thermostat
  • Turn off electronics when you’re not using them
  • Wash clothes in cold water
  • Line dry clothes when possible
  • Use a power strip to save energy
  • Start a compost pile
  • Plant trees or shrubs to shade your home

It’s also a good idea to shop around for energy-efficient products. Many utility companies offer rebates and discounts on energy-efficient items. 

There you have it—eight tips to help you afford living alone. While it may not be easy at first, with a little planning and effort, you can make it work.