Editor’s note: Quorum is not affiliated with any of the companies mentioned in this article and derives no benefit from these businesses for placement in this article.
If you’re a recent college graduate living with your parents, the desire to move out probably grows with each day you spend back in your childhood bedroom. So why not figure out how much money you need to turn your dream of independence into reality?
Without a plan, you risk squandering away your moving-out money and living with your parents even longer. Or worse—you could move out too soon and end up back home because your money runs out faster than expected.
Let’s face it, moving out takes a decent chunk of cash. But once you identify the various costs, you can save and budget your way out of mom and dad’s house. Your ultimate goal is to be able to live on your own without unnecessary financial stress.
You have the choice to rent or buy when moving out, but most recent college grads rent their first place because it gives them more flexibility to move around and doesn’t require as much advance money. But there are still upfront costs. Before you even pack up your stuff, you need funds to complete the leasing process and get your new digs ready to live in. This includes the following:
- Application fee: According to TurboTenant, expect to pay as much as $75 for the landlord to screen your application, which can include a background check, credit check and even an eviction report. Some landlords actually charge separate fees for background or credit checks that typically run between $15 and $30.
- Security deposit: Most landlords require a refundable deposit equal to one month’s rent. As long as you fulfill the lease obligations and leave the place in good condition, you’ll get this money back when you move out.
- First and last month’s rent: You’ll likely also have to pay the first and last month’s rent in advance.
- Move-in fee: Some landlords also charge a non-refundable move-in fee to get the place ready for you. This can be anywhere from 33 to 50% of the monthly rent.
- Pet deposit or fee: If you want to bring your furry friend along, expect the landlord to charge you a one-time $200 to $600 refundable pet deposit or a non-refundable monthly pet fee between $10 and $50.
Other expenses (whether you rent or buy):
- Furnishing your place: You need something to sleep, eat and sit on. Asking family and friends for hand-me-down furniture or visit your local thrift store to keep this expense down.
- Stocking your pantry: You also have to buy an initial supply of food, paper products and cleaning supplies for your new place.
- Utility deposits: A new renter without a pre-existing account often has to pay a deposit to the get their electricity, water and natural gas hooked up. The same may apply for internet or cable service.
- Moving costs: If you don’t have much stuff, your moving expenses might be no more than the cost of pizza to get friends and family to help you. But if you have a lot of furniture, you might need to rent a moving truck or want to pay professional movers to handle the task for you.
If you can furnish your new place for $1,000 and the monthly rent is also $1,000, you’re looking at close to $5,000 just to move in. That’s assuming you don’t have a pet and can move yourself.
Once you’re in your new digs, you need to budget for your monthly rent. Financial experts recommend spending no more than 30% of your monthly gross income on housing. For example, if your rent is $1,000, you ideally want to be earning at least $3,000 per month. You can do a quick Google search for apartments in your area to find out how much you can expect to pay in monthly rent.
In addition to rent, don’t forget to budget for these monthly expenses:
- Natural gas
- Car payment, gas and auto insurance if you own a car
- Money for public transportation or ride-sharing services if needed
- Subscription services
- Renters’ insurance
- Student loan and credit card payment
You also want to give yourself an opportunity to save money. A good way to ensure you don’t spend every cent you earn is to include a savings contribution into your monthly budget and set up automatic savings deposits or direct deposit.
There’s one last money bucket to consider before you move out: your emergency fund. It’s best to have at least three to six months’ worth of expenses available in case of a crisis, such as losing your job, or an unexpected expense, such as a large medical or car repair bill.
If moving out is currently unrealistic, try these ways to speed up the process.
Quorum offers for you
The Fed Just Raised Rates and We Followed Suit.
Earn more from your money. Check out our newly increased savings rates today!
We think you rate highly, too,
We've kept your term account (CD) rates high because you rate highly with us. It's just another way we're saying thank you for being a valued member of Quorum. Lock in a great rate—and peace of mind—with a Quorum Term Account.
Make Way for Mobile Deposits
Making a mobile deposits with Quorum’s mobile banking app is as simple as snapping a picture of your check. No stamps, no lines, no hassle.