Moving out for the first time is incredibly exciting. Living on your own provides a unique kind of independence. However, some of the responsibilities associated with living on your own, especially financial management, can be intimidating.
“Living in your own apartment means taking on a number of financial responsibilities that you may not have been accustomed to before. The key to coming out on top is to plan ahead and to develop a working budget from day one,” says Jeff Schwartz, executive director, Consolidated Credit Counseling Services of Canada.
“The danger if you don’t have a budget (or stick to your budget) is that you may have to turn to credit to pay for your living expenses. That is a bad habit you should shut down right from the very start,” says Schwartz.
Here are some tips on moving out for the first time.
A very detailed budget
You probably know that you need to set out a budget, but are you aware of all of the costs that you’ll be responsible for month-to-month? Include rent and utilities, but don’t forget things like parking or transportation, groceries, phone/internet/cable and any debt payments that you’ve got. Ultimately, you should be able to sock away a little for savings.
Track your spending as well. If you don’t know in detail what is coming in and what is going out, you may find yourself short.
Don’t forget insurance
Often people roll the dice and don’t take out tenant’s insurance, but this is one premium that may be very much worth your while. And tenant’s insurance won’t cost you an arm and a leg, it is very affordable. Moreover, tenant’s insurance not only protects your belongings while you live in the apartment, it protects you from some liability. For example, if a fire starts in your apartment, you could be liable for damage to the building and/or to your neighbours’ belongings as well. The costs to you could be substantial.
Pay your bills
It is essential that you pay your bills on time. Don’t wait for them to arrive in the mail, but make note of when they are due.
Take advantage of automatic payments if it is easier. Even though the payments are supposed to be automatic it’s a good idea monitor them and make sure they are being paid. This will also help you insure you are not over spending if they don’t get paid.
Short on cash?
When you are taking on all of these extra expenses for the first time, you may find your cash flow a little tight. There are lots of ways you can save money to get a little wiggle room in your budget.
Avoid eating out. Instead invite friends over for a pot luck dinner. Instead of going to the movies, stream one from the comfort of your couch.
If you’ve got room, take on a roommate to help share the costs.
Visit consignment and thrift stores to furnish your new place. Ask friends and family for anything they are getting rid of. If you need to buy décor, do it a little at time.
Are you struggling with student debt? Do you know how budgeting can help set you up for financial success? A little planning today will keep you financially healthy in the years to come. Call one of our trained credit counsellors at 1-888-294-3130 or visit our free online debt analysis.