You want your independence, but at the same time, you don't want to be totally broke. Here's how to really save before moving out.
Do you envy your friends who seem to have it all together—living on their own in a swanky downtown condo, or finally being able to afford a house, while you’re still stuck with your parents? It can feel like an uphill battle to save money to move out. And you’re not alone.
Moving out is a rite of passage for many millennials, but it can get pretty pricey. When you’re young, single, and don’t have much in the way of responsibilities, it’s tempting to just pack up and move without giving it a thought. You want to get your independence, but at the same time, you don’t want to be totally broke.
According to a 2022 monthly report, the average rent for a one-bedroom apartment in the U.S. is $1,697. But in some cities, like New Jersey, Boston, and San Francisco, the number is closer to $3,500.
In a perfect world, you’d have enough money stashed away to cover at least a year’s worth of rent and other essentials. But given the current economic situation, that’s not always realistic.
So, how much money do you really need to save to move out? Turns out, the answer is pretty individualized. Every situation is different, but we’re here to help so you can make the jump as confidently as possible.
Moving out is within reach—all you need is a plan and some dedication.
The most critical factor in deciding whether or not to move out is your finances. If you’re barely scraping by, it’s probably not the best idea to add the extra rent expense. But if you’re comfortable with your current lifestyle and have some wiggle room for more spending, you may be ready to take on the extra cost.
Here are some things to ensure prior to moving out:
Do some research to find out the costs associated with moving out. In addition to rent, you’ll need to factor in utilities, groceries, transportation, and other incidentals.
Start by creating a list of your current obligations to get a better idea of where your money is going and how much you can realistically afford to spend. Then, compare that to the average cost of living in your city to see if you can cover all your bases.
If you’re living with your family, you’re probably used to having your meals and transportation expenses covered. But once you’re on your own, those costs will fall squarely on your shoulders.
Eating out every night is going to get expensive—fast. And if you don’t have a car, you’ll need to factor in the cost of public transportation or ride-sharing services.
Are you carrying debt? Whether it’s from student loans, credit cards, or other sources—it’s essential to have a plan in place for how you’ll continue to make those payments once you’re on your own.
Take a close look at your debts and develop a strategy for paying them off. If you’re not sure where to start, there are plenty of resources available to help you get started.
Once you have a plan, make sure you’re sticking to it. The last thing you want is to move out and then find yourself in over your head.
Emergencies happen, and when they do, it’s important to have some savings set aside to cover the unexpected costs.
Ideally, you should have enough money saved to cover three to six months’ worth of living expenses to give you a cushion in case you face a financial setback or run into unexpected expenses.
If you don’t have an emergency fund, now is the time to start saving. Begin by setting aside a small amount each month until you reach your goal.
There are a lot of costs associated with moving out, and they can add up quickly.
In addition to the first month’s rent, you may need to pay a security deposit, pet deposit, utility deposit, and other fees. You’ll also need to factor in the cost of moving itself. It’s up to you to decide whether you want to hire professional movers or do it yourself, but either way, it’s going to cost you.
Don’t forget the little things, either. Once you’re in your new place, you’ll need to buy essentials like furniture, dishes, bedding, and more.
Without enough cash on hand to cover these costs, you may find yourself resorting to high-interest credit cards or loans. And that’s not a position you want to be in.
Now that you know how to tell if you’re ready to move out, it’s time to start putting your plan into action.
It is recommended to save up enough for 3 months of your typical costs, such as rent, bills, and food. Therefore, if you estimate your average monthly cost to be $1500, you ought to save up to $4500 prior to moving out.
After you calculate your average monthly expenditure it is best to break it down into more bite-sized chunks to make it more manageable — for example, saving $500 a month for 9 months.,
It’s a whole new world out there when you’re living on your own.
You’ll need to get used to cooking your own meals, doing your own laundry, and cleaning your own place. But one thing that shouldn’t change is your commitment to saving money.
Make saving a priority by setting aside money each month. And, when you get your paycheck, don’t start by spending it. Instead, immediately transfer the amount you’ve planned to set aside into your savings account.
Your new saving routine may mean making some lifestyle changes, like eating out less or giving up your cable subscription. But trust us, it’ll be worth it in the end when you have enough money saved up.
We get it: Life is busy.
Between work, school, your social life, and everything else you have going on, it can be tough to keep track of your finances. But if you’re serious about reaching your savings goals, automating your savings is a great way to do it.
Most banks offer the option to set up automatic transfers into your savings account so you can set it and forget it.
Depending on your bank’s policies, you may be able to schedule transfers to occur weekly, bi-weekly, or monthly. And, if you get paid more than once a month, you can automate multiple transfers throughout the month.
Not only do auto transfers make saving easier, but it also helps you stay on track.
While it may be tempting to splurge on nights out or new clothes, remember that every dollar you spend is one less dollar you have to save.
To reach your savings goals, you may need to make some sacrifices. That doesn’t mean you have to give up everything you enjoy, but it does mean being more mindful of your spending.
Here are a few ways to cut back on expenses:
Of course, this is just a starting point. There are several other ways to cut back on expenses. The key is to find what works for you and stick with it.
In addition to cutting back on expenses, you may also need to find ways to boost your income.
If you’re currently employed, it could mean asking for a raise or picking up a few extra shifts. You could also consider taking on a side gig to bring in some extra cash.
There are several ways to make money on the side, including:
The options are endless. And, with a bit of creativity, you should be able to find a side gig that fits your interests and lifestyle.
You don’t have to (and shouldn’t) save a ton of money overnight.
Practice makes perfect, and the same goes for saving money. The more you do it, the easier it will become. So, start small and gradually increase the amount you’re setting aside each month.
If you’re not sure how much you can afford to save, you can start by setting aside 5% of your income. Once you get in the habit of saving, you can increase that amount to 10% or even 15%.
The important thing is to get started and to keep at it.
There’s no denying that moving out can be expensive. In addition to rent, you’ll need to factor in utilities, furniture, and all the other costs associated with setting up a new home.
To get a better idea of what you can expect to pay, you’ll need to consider the upfront, recurring and one-time costs.
#1. Advance rent: Your landlord may require you to pay the first month’s rent before you move in, which can range anywhere from $500 to $4,000, depending on the size of the apartment and the location.
#2. Security deposit: Another cost you may need to factor in is the security deposit. This cost is usually equal to one month’s rent, and it serves as a way to protect against any damages that may occur during your tenancy.
#3. Application fee: No one wants to accept a tenant that will constitute a nuisance later. So, most landlords demand an application fee to run background and credit checks. This can cost anywhere from $20 to $100.
#4. Moving costs: Unless you have friends or family members who are willing to help you move, you may need to hire a moving company. The cost of this will depend on the size of your apartment, the distance you’re moving, and the amount of stuff you need to move.
#5. Utilities: Before you move in, it’s crucial to set up your utilities. This includes electricity, gas, water, trash, and the internet. Based on your location and the service provider you choose, the monthly cost of utilities can range from $50 to $200.
|Basic Upfront Costs||Estimated Price|
|Total upfront costs||$4,594|
#1. Rent: Yes, this is a no-brainer. But it’s important to mention nonetheless. The average cost of renting a one-bedroom apartment in the U.S. is $1,697 per month.
#2. Groceries: According to a report from Gallup, the average American spends $151 per week on food, amounting to $604 a month.
#3. Insurance: Everyone needs insurance, whether it’s auto, health, or renter’s insurance. The cost of coverage will depend on several factors, including your age, health, the type of insurance you’re looking for, and the amount of deductible you’re willing to pay.
#4. Entertainment: Yeah, we understand that you need to blow off some steam after a long work week. But be mindful not to overdo it. Between nights out on the town, tickets to concerts, and a few rounds of drinks at your favorite bar, you can expect to spend between $100 and $300 per month on entertainment.
#5. Student loan payments: If you’re like most Americans, you probably have student debt to pay off. A 2022 report from Education Data Initiative reveals that the average monthly student loan payment is $460. But this will vary depending on the amount you borrowed and the interest rate on the loan.
|Basic recurring costs||Estimated Price|
|Total recurring costs||$3,517|
#1. Decor and Furniture: One of the fun parts about moving into a new place is making it your own. But like other needs, it comes at a cost. When you consider picture frames, rugs, and other knick-knacks, you can expect to spend a few hundred dollars on decor. And unless you plan to sleep on an air mattress, you’ll need to buy some furniture.
#2. Kitchen supplies: In addition to furniture, you’ll need to buy some basic kitchen supplies like pots, pans, and dishes. You can get away with spending $350 or less on these items if you shop at a discount store.
#3. Bathroom supplies: Don’t forget about the bathroom! Essentials like toilet paper, towels, and soap can cost you another $100 or so.
#4. Cleaning supplies: The last thing you want to do is stay in a dirty apartment. So before you move in, pick up some basic cleaning supplies like a vacuum, mop, and some cleaning products. With a few hundred dollars, you can get all of the necessary supplies to keep your place clean.
|Other costs||Estimated Price|
|Furniture and decor||$2500|
In total, you can expect to spend between $11,000 and $12,000 when you first move out. But there’s no need to be worried—this is a one-time expense. Once you’ve made your initial investment, your monthly costs should be much lower.
Moving out is a big step—both emotionally and financially. But with a little bit of planning and saving, you can make the transition with ease – especially with utilizing Stackin’ in order to assist you with your spending. Remember to plan for the initial costs of setting up your new place and be mindful of your monthly expenses once you’re all moved in.
Most importantly, don’t forget to have fun! After all, this is a new chapter in your life.