Life and all its endless possibilities lie before you when you become an adult. Likely, the biggest one is moving out on your own. After 18+ years of living by someone else’s rules, this may seem like Nirvana, but you do need to be careful about a few things. Even though it’s been a long time since I was 18, I remember very well the feeling of wanting to set out on my own. However, to keep my college costs down I decided to live at home for a few more years while I attended college. It was so worth it when I received my college degree and was completely debt free! So before you hire professional movers and leave for new adventures check out this advice. Here are some things to consider before deciding to leave the nest:
1. Is higher education in your future?
If you have intentions of going to college or university for further studies, to obtain a degree, or to learn a vocation, you may want to consider waiting on a permanent move out of your parent’s home until your education is complete. Higher earnings and steady employment may be your winning ticket for moving out on your own after graduation. Believe me, incurring large amounts of debt is not worth it. But here’s a caveat: If your parents make too much money for you to be eligible for many grants and scholarships, being independent may provide you with more funding options.
2. Do you have steady, reliable employment?
If your work history jumps and skips around many different jobs with occasional unemployment in between, you may not be ready just yet to fly out of the family nest. Even a short two-week span between jobs can seriously affect your ability to pay expenses, making it difficult to catch up if you fall behind. Steady employment of at least a year would be the minimum to achieve before moving out. And here’s another tip: Always look for other work before resigning a current position or if rumors suggest your job is in jeopardy. It’s much easier to find a new position while currently employed than when unemployed.
3. Have you consistently lived on a budget for a minimum of six months?
You don’t make an imaginary budget for what you expect to encounter when you move out and think that’s it. You should have a budget well in hand while living with your parents (and sticking to it). Don’t attempt moving out unless you have stocked an emergency savings fund with a minimum of three to six months’ worth of estimated expenses. If you start your financial life living by the simple 10-10-80 rule (save 10%, give 10%, and live off 80%), you will have given yourself a solid financial foundation that will last a lifetime. One of the best financial tips I was ever given was that if you can’t afford to pay cash for it, you can’t afford it. Don’t build debt, build capital!
4. Can you afford housemates?
This may seem like a strange question. After all, wouldn’t it be less expensive to live with roommates? Well, yes and no. Yes, sharing expenses is an acceptable way to afford living on your own. However, your expenses and living situation will only be as stable as the least stable housemate. If you have a place leased in your name and you are subletting to roommates, you are ultimately responsible even if every roommate suddenly bails out and leaves you with 100% of the bills. Make sure that you can afford the entire gamut of expenses on a place if the worst-case scenario should occur.
Wealth-Building Tip: Stable, dependable housemates cause your savings to grow when you sublet an affordable housing arrangement. If you’re purchasing a property, make sure to shop around for the best deal on property financing, or see a mortgage broker.
The best environment for a successful transition from living at home to living on your own will derive from settling these important questions. Enjoy all of life’s possibilities without the stress and strain of burgeoning debt and financial obligations.