How Much Should You Save Before Moving Out?

Have you just finished college and don’t want to move back in with your parents? Ready to leave your childhood home or just done living with your college roommate? Well, then, it looks like you’re ready to move out. You might have everything lined up: the perfect place, great location, great price. However, you’re probably wondering how much you need to save before you move out. In this article, we’ll dive deep into how much money you need to move out, and the different types of expenses to consider before deciding if moving out right now is the best option for you financially.

How Much Money Do You Need To Move Out?

Whether you're getting ready to move out of your parent's house, college dorm, or any other living situation, it's essential to consider and prepare for all the upfront and recurring expenses that you'll need to cover. These may include things like application fees, security deposits, rent, utilities, groceries, transportation and more.

To ensure that you're financially prepared for this significant transition, a common rule of thumb says you should save on average between $5,000 and $12,000 before moving out, depending on where you are moving to and the cost of living. This amount will help you find an affordable place to live, buy essential furniture and household items, cover moving expenses, and pay other bills.

When budgeting for your new living situation, don't forget to set aside some money for emergencies as well. It's always a good idea to have a safety net in case unforeseen expenses come up, like a sudden car repair or medical bill.

Expenses To Prepare For When Moving Out

Moving out is a significant step in not only your personal life but your financial journey as well. As this is an exciting time, it’s helpful to be prepared for a few different kinds of expenses that you’ll need to pay. However, if you have enough money saved beforehand, you’ll be ready to make that transition.

Upfront Expenses

Before moving into your new place, it’s important to understand the upfront expenses that you will need to pay. These expenses are one-time payments that you must make to secure your new home. It’s highly recommended that you prepare for these fees ahead of time so you don’t face any financial surprises down the line. Some of the upfront expenses to consider when moving out may include:

●      Application fee: A nonrefundable fee charged by the landlord to cover the costs of the application that is being processed.

●      Security deposit: Money that is paid in advance and is given to a landlord, lender, or seller of a home or apartment to protect them in case the tenant damages the property or violates the terms of the lease agreement. It’s typically equal to one month’s rent and is held by the landlord to cover any damages caused by the tenant. When you move out, your landlord will typically return part or all of your security deposit depending on the condition you leave the place in. In addition, the first and last month's rent are typically collected as part of the security deposit, due upon move-in and are nonrefundable.

●      Pet deposit: A nonrefundable fee paid by pet owners to cover the costs of potential damage caused by pets.

●      Moving costs: Costs related to moving, such as hiring a moving company, renting a truck, buying packing supplies, and paying movers.

●      Furnishings: Purchasing or renting out furniture and other appliances.

Monthly Expenses

As there are one-time, upfront expenses that you need to prepare for when you move out, there are also monthly living expenses. These monthly expenses include:

●      Rent: An ongoing payment that covers the cost of living in a place that you rent. Rent is usually the biggest monthly expense, and it varies depending on the location, size, and type of accommodation you choose.

●      Renters insurance: Offers tenants a means to protect themselves and some of their belongings when living in a rental property.

●      Utilities: Ongoing expenses that need to be paid to keep your place operating, like electricity, water, and gas.

●      Food: Food is a daily expense that is based on your preferences and lifestyle.

●      Transportation: Getting from point A to point B includes costs for car ownership, fuel, and maintenance, and public transportation fees.

●      Debts: Ongoing expenses such as student loans, credit cards, and auto loans that need to be repaid.

Things To Consider When Saving To Move Out

Moving out can be both an exciting and liberating experience. However, it is also crucial to save money in order to prepare for your financial future once you have moved out. Saving money while planning to move out is not as daunting as it may appear. Some considerations that may impact your savings goals include:

●      Living with a roommate: Sharing expenses with a roommate can help reduce the costs significantly as you can split costs like rent, utilities and other household expenses.

●      Buying second-hand furniture: Buying furniture that has been lightly used by another owner can be an affordable option to furnish your new place and cost less than what it normally goes for.

●      Creating a budget: Creating a detailed budget can help you balance out what you need, want and how much to save, as well as track your funds easily.

●      Building an emergency fund: Building an emergency fund can provide financial security in case of an unexpected expense. 

●      Analyzing monthly expenses: You should periodically evaluate your expenses, identifying areas where you can cut back to meet your goals.

●      Take up a side hustle: Take up a side hustle or freelancing gig to boost your income and save more money.

The Bottom Line

When it comes to successfully moving out of your current home and into a new one, it's important to have a solid financial plan in place. To make the transition as smooth as possible, you'll likely need to save between $5,000 and $12,000, depending on factors such as your timing, where you are moving to and how much you can realistically set aside each month.

Keep in mind that there are a number of expenses you'll need to cover before you can officially move into your new place, such as the first and last month's rent, security deposit, moving costs, and any new furniture or household essentials you may need. However, by saving diligently and planning ahead, you can minimize stress and feel confident in your ability to make this important life change.

If you're ready to start saving, you can sign up for a Rocket Money℠ account and manage your finances efficiently today.