The moment always comes when we realize that it’s time to move out and start living on our own. But living alone may not always be that magical dream we all imagine if we don’t plan ahead of time. Here are a few tips to keep this adventure from turning into a nightmare.
- Where should I start? If you already made up your mind and want to move out as soon as possible, start saving up today. Living on your own is more than rent payments and monthly bills like electricity and water. So start by figuring out how you really manage your finances in order to make the necessary adjustments. For example, if you spend too much on food, try cooking in instead of dinning out every weekend.
- How much does it cost to live on your own? Rent is just a small part of the many expenses you’ll come upon. Start making a list of the things you already own and the things you’ll need for your new place. That will help cut down costs. You should also list out all your monthly expenses (like water, groceries, internet, electricity, gas, and more) and calculate an average of how much you plan to spend during nights out with friends. Ask someone who already moved out to help you sort out these numbers.
- What’s my income and how much should I be spending it? By now, you should have a better understanding of all your monthly expenses. The next step is to compare them to your monthly income. Although there are many online tools to help you plan and manage personal budgets, here you can find a spreadsheet to kick-start the process.
Also, at Mi Banco Online you can find a Personal Financial Manager (PFM). This tool allows you to gain a better understanding of where and in what you’re spending most of your money. You can also personalize it according to your needs.
- Can I really do this? During this process, it’s important to keep it real. That’s why practicing is always a good idea. Try asking your parents to give you a monthly bill to pay. This exercise will test your willingness to assume the responsibilities that come with living on your own. It will also give you a better idea of how much you can pay per month.
- How can I earn more money? The quickest way to save is by finding new opportunities to make more money. For example, you can find a second job or start a garage sale with the things you no longer want. Another creative way to make more money is by creating your own blog. If you are passionate about a certain topic, turn it into a business. With a blog you can make money through ads, affiliates, and sponsored blog posts. If you are a student, a good way to make some extra bucks is by tutoring other students. When the time comes to earn that extra cash for this new stage in life, don’t be scared to try new things and get creative!
- What shouldn’t I forget? Once you calculate all the expenses per month, in case of emergencies, you should always be able to save at least 10% of your monthly income. This money could save you from a lot of headaches, for example: if something in the apartment needs to be fixed, if you suddenly have health problems, if you lose your job, etc.
These tips can smooth out your journey towards becoming independent. Your finances shouldn’t keep you from reaching your goals if you start planning and taking control ahead of time.
Visit our section Banking 101 for more information and tips for achieving your independence.