Ready for the big step of living alone?

Here are some financial tips to help you do it. There comes a time in our lives life when we want to take the big step of becoming independent or we simply feel we must do it. But unless you plan it properly, living alone will not be the dream you hoped for. Don’t let this new adventure turn into a nightmare; use these tips to get ready.  

• Where to start? If you’re already thinking about moving out, then you must start saving money. Living alone is much more than just paying rent, electric power, and water. Therefore, you need to start being more aware of how you handle your finances. Control and reduce the number of times you go out with your friends or how often you eat out or go shopping.

• How much does it cost to live alone? Rent is just one of many expenses in which you’ll have to incur. Start by making a list of everything you currently have and which things you’ll need to buy. Also, make an estimate of recurring expenses such as water and power (utilities), groceries, internet, and gasoline —and don’t forget to include other general expenses like going out with your friends. You can talk to a friend who already lives alone and has a similar lifestyle to yours; ask them to help you calculate these amounts.

• How much do you earn and how much can you spend? You should already have an idea of how much money you would need to start this new stage… so now compare it with your income. There are many online tools that can help you create a detailed personal budget, but here is a table that could help you prepare a basic budget.

• Also, Mi Banco Online offers a tool called Personal Financial Manager (PFM) that allows you to see how much money you’ve spent in different categories so you can get organized and find out in what area, specifically, you’re spending more than you should. In addition, you can customize it according to your needs.

• Can you do it? It’s very important that to be realistic throughout the entire planning process. Practicing is a good idea. Talk to your parents so they can assign some household expenses to you; this will allow you to confirm your willingness to assume these responsibilities. This can also help you determine the maximum monthly payment you can afford.

• How can you make extra money? You can save even faster if you look for other ways to generate income, such as getting a second or third job. You can also search your house for things you no longer use or simply don’t want anymore; make some money by selling them. Creating your own blog is another easy and creative way to make money. If you are well informed about a topic, take advantage of this knowledge, and turn it into a business. A blog can generate business with its ads, affiliates, sponsored posts, and more. If you are studying, a good way to earn extra money is by tutoring other students. When it comes to earning money for this new life stage, don’t be afraid and get creative.

• What is one thing you can’t forget? Once you have an idea of how much your monthly expenses will be, it’s extremely important that you also include savings in your budget; contribute some money every month to maintain an emergency fund. Ideally, you should save 10% of your monthly check. This emergency fund could save you a lot of headaches and trouble if there’s an unforeseen event at the apartment (like an appliance breaking down), if you have health issues, if you lose your job, etc.

These tips can help you embark on the great adventure of becoming independent. Your finances don’t have to be a nightmare if you choose to be in control from now on. Visit our Banking 101 section for more information and tips that will help you become independent. The content of this material is provided for informational and educational purposes only and may not be applicable in all situations. Its content should not be construed as advice of any kind or as a suggestion to take (or inhibit) any particular action. The information and overviews included are designed to help you understand some of the factors that you should generally consider when evaluating the relevance of any financial strategy. It does not include or take into account all factors that may be relevant to your individual financial needs. By providing this information, we assume that you are able to evaluate this information and exercise your independent judgment.