How Much Money Do You Need To Move Out - Moving.com (2024)

How Much Money Do You Need To Move Out - Moving.com (1)

Today’s young adults are doing things a little bit differently than they used to. According to a recent survey by Pew Research Center, the number of multigenerational homes in the U.S. has quadrupled since the 1970s. Nearly one-third of Americans aged 25 to 29 lived in a multigenerational home, with the vast majority living with their parents. It’s due to a lot of varying factors — such as debt, the current state of the housing market, the pandemic — and the fact that how much money you need to move out is no small chunk of change.

For most people, moving out on their own requires careful saving and planning over time. This is true even for those who are moving intocities where rent is pretty cost-effective. You’ve got to start somewhere though, and the best place to start is by figuring out how much money you need to move out so that you can begin the budgeting process. Here are the costs that you’ll want to factor in.

Rent/Mortgage

Determininghow much rent you can afford or how much mortgage you can afford is the first part of the equation when it comes to planning to move out on your own.

30% Rule and 43% Rule

Conventional wisdom used to dictate that no more than 30% of your gross monthly income (which is your total income before taxes or other deductions are taken out) should be going to your housing costs. But now with student loans, credit card debt, medical debt and other types of debts, you should take your debt-to-income ratio into accountand apply the 43% rule.

The Consumer Financial Protection Bureau defines the debt-to-income ratio as all your monthly debt payments divided by your gross monthly income. So, what’s 43% of your income? This should be the max you want to spend each month on all housing costs and all debts. For example, if you make $3,000 a month, the most you should spend on all housing costs and all debts is $1,290. Keep in mind that ideally 43% is the max, but you should aim to come in under so that you have more room in your budget for savings, retirement, investments, etc.

Of course, the 30% rule and 43% rules are just guidelines and you’ll need to figure out what’s best for the lifestyle you want to live, sacrifices you’re willing to make and your own personal financial goals. If you’re determined to move out, keep in mind that you might have to cut back spending in other areas to make living on your own sustainable.

We strongly insist that you resist the temptation to rent beyond your means. Leases and mortgages aren’t forever — if you can afford to spend more later on, you can always move. Err on the side of affordability and underspending on rent or mortgage and you’ll put yourself in a better financial position.

Getting an apartment

Decided to rent? Determining how much money you need to move out gets a little bit trickier when you start to consider all the other costs that go into getting an apartment. Your exact costs will vary depending on where you’re renting and what your landlord or management company’s policies are, but rental costs that you may come up against in order to rent an apartment include:

    • Rental application fees and/or credit check fee
    • First and last month’s rent
    • Security deposit (generally equal to one month’s rent)
    • Non-refundable move-in fee
    • Pet deposit
    • Parking fee
    • Renter’s insurance (the average cost is about $15 to $20 per month)

Every landlord and management company is different. Some nix the security deposit — which is refundable upon move-out — for a non-refundable move-in fee, which is typically around a few hundred dollars. Others just require the first month’s rent, and not the last month’s rent. Your exact situation will depend on who you’re renting from, and your credit score will likely factor in as well.

Moving costs

There are a lot ofmoving coststo consider, with the biggest ones beingpacking suppliesand transportation costs (either a professionalmoving companyor atruck rental). Altogether, these costs can total anywhere from under a hundred bucks (if you get creative with cheap or even free packing supplies and move yourself in a vehicle you can use for free) up to a few thousand (if you’re using a moving company and relocating to another state).

Chances are that if you’re moving out on your own for the first time your moving costs won’t be that high, since you’ll have less furniture and belongings to pack up and transport. Do factor in other less obvious costs, however, such as missed pay if you need to take a day or two off of work for your move, as well as if you need to rent any storage space.

Utilities

You’ll need utilities set up in your new place from day one (here’s how to transfer utilities if you’re not starting from scratch). If you are renting, your landlord may include one or more of these as part of your monthly rent, but it’s not a guarantee. Here arethe utilities to consider, as well as how much you can expect to spend on them.

Electricity

The average monthly bill amounts vary by state but don’t exceed $300. For example, it’s as low as $81 in Louisiana but as high as $246 in Hawaii. The averages for most states though hover a little above $100.

Gas

You’ll need gas to cook, but it isn’t prohibitively expensive. According to the National Gas Association, the average gas bill in the U.S. is $59.33 a month.

Heating

Different types of heating have different costs. Natural gas heating is cheaper at about $55 a month, while electric heating keeps soaring, largely due to fuel shortages, and could run at least $100 and up.

Internet

You don’tneedinternet, but you’re probably going to want it. How much you spend depends on your internet speed. As of 2021, the average cost of broadband Internet was $64 per month. Most internet providers have plans starting around $40 per month, but with taxes, fees and equipment costs typically add on around $15 more. In some areas, internet plans can run much higher.

If you’re on the hook for all of these utility costs on top of rent, that’s a large chunk of money to shell out every month. Tack on more if you also want cable or streaming subscriptions.

Furnishings

How much you spend on furnishings depends largely on your needs and what you can afford. Unlike other costs under the umbrella of how much money you need to move out, this amount can vary greatly — and that’s a good thing. As long as you have the basics, like a place to sleep, some kitchenware, and some basic cleaning supplies, you can add on everything else as you can afford it. And when you are ready to start stocking up, there are plenty of places to find used furniture. You can find great options online, too.

To help you figure out everything that you’ll need, we’ve put together a list ofessentials you’ll need for your first apartment, as well as information onhow to stock a kitchen from scratch. Go through the list and figure out what you already have, what you need to buy now, and what you can wait and buy later.

Saving money on moving out

It can be discouraging to look at all these costs, but keep in mind that there are plenty of ways to keep the actual amount lower. Here are some ways to save money before, during and after you move out.

Budget for your move

Moving, especially if you’re moving long distance, won’t be cheap. The averagecost of hiring professional moversfor an out-of-state move is $4,890 (for a distance of 1,000 miles). Even if you’re considering aDIY move, you still have to pay for a truck rental or container, moving supplies and various other expenses. Tofigure out your budget, start with how much you are willing and able to spend on the move. Then list all necessary moving expenses. Remember to put a bit of extra money aside for unexpected expenses.

Look at all your moving options

You can hire a moving company, do a complete DIY move, or a hybrid. For example, you can rent a truck only, hire someone to help you pack, or use a portable moving container. There are many options. Compare prices of moving companies against other options to reach a decision on the best way to move that works for you. And get at least three quotes.

Budget for the cost of living

In addition to factoring in rent or mortgage, moving expenses, utilities and getting your new place furnished, you should also look at the transportation costs, what you’ll be spending on groceries, medications, books and other cost-of-living things that matter to you. A cost-of-living calculator tool can help you determine how affordable your city or town is.

Be flexible on when you move

If you don’t have a tight moving schedule, you can save money by opting for amid-week, mid-month move. Moving on weekends and the first or last days of the month will be pricier because of higher demand.

Decide if you can afford to live alone

Getting a roommate is a great way to divide up costs and save on expenses. You’ll have to decide if the advantages outweigh the disadvantages and whether you can even afford to consider living alone.

Get rid of stuff

Lightening your load for the move will mean you’ll have fewer moving expenses like maybe a smaller truck and spending less on packing supplies. Go through your closet and all of your drawers and pull out all of the items you no longer want or need. Then make a plan fordonating, recycling or tossing each item as appropriate.

Pick up some basic lifestyle skills

If you’re moving out of your parents’ house and this will be the first time you’ll be on your own, it’s a good idea to check in with yourself to see if you are lacking in terms of taking care of yourself. Can you clean? Cook? Shop for groceries and other necessities? This isn’t just about surviving and thriving on your own but saving money. It will help your budget if you don’t have to pay someone to clean your place or go out to eat because you don’t know how to cook. Try to pick up whatever skills you can before you move out to save money in the future.

Establish good credit

Your credit history will be important to secure housing. If you haven’t alreadyestablished good credit, the time to start is before you move. A bad credit score or no credit score can hamper your ability to rent an apartment or get a mortgage. Many landlords and property managers run credit checks on rental applicants. If you don’t have a credit history you may need a co-signer with one. And no bank will give you a loan for the house if your credit history is not good. Start building a good credit history by opening a creditcard andmaking timely payments on all of your current bills and loans.

Ask for moving help and financial assistance

Ask your friend or a relative to borrow their car or help you pack and load up on moving day. If you’re moving for a job, ask your company whether they are willing to offer employee relocation assistance. If they do, ask what’s included in a job relocation packageto help you stay informed and to negotiate. And, if you’re in a tough financial spot you may qualify for a low-income moving assistance program through various local organizations or national charities. Research those and reach out.

Can you afford to move out?

Acquiring the money you need to move out might not be an overnight process, but there’s nothing wrong with taking your time. Save for as long as you can so that, when you do have enough stocked up, you won’t have to stretch yourself thin to meet your bills every month.

Related Articles:

  • How Much Rent Can You Afford?
  • How to Get Your Security Deposit Back When You Move Out
  • Moving To Another State With No Money? Here’s How to Make It Work
  • 6 Things a Landlord Can Deduct From a Security Deposit
  • Tips For Apartment Hunting in a Pandemic
  • 13 Tips for Budget Grocery Shopping
  • How To Get Rental Assistance
  • The Best Time of Year to Rent an Apartment
  • Got An Eviction Notice? Here’s What To Do
  • 7 Renting Costs to Consider In Your Budget
How Much Money Do You Need To Move Out - Moving.com (2024)

FAQs

How Much Money Do You Need To Move Out - Moving.com? ›

The First Month's Rent or Mortgage: We suggest saving enough money for at least three months' worth of rent or mortgage before moving out. A Security Deposit: This usually costs the same as your monthly rent. You should be able to get your money back when you move out.

How much money should I have saved before moving out? ›

To help you get a good plan in place and make your dream a reality, keep reading. Before moving out, ideally save six months' worth of living expenses, though some manage with less. Calculate all potential upfront and ongoing costs to ensure affordability.

Is $5000 enough to move out? ›

The answer depends on various factors, such as your location, lifestyle, and personal circ*mstances. While $5,000 can be a good starting point, it's crucial to have a clear understanding of the costs associated with moving out and living independently.

How much income should you have to move out? ›

To move out, you'll need to earn enough money to cover rent, utilities, food and transportation every month. You'll also need to cover one-time costs like moving and any required security deposits. A good rule of thumb is that your monthly income should be three times what you spend on rent.

Is $4000 enough to move out? ›

In general, you should have at least three months' worth of living expenses saved up as emergency funds just in case something unexpected happens during your move. For example, if you're planning on renting an apartment for $1,200 per month, then you'll need about $4,000 in savings before moving out.

Is $12,000 enough to move out? ›

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.

Is $20,000 enough to move out? ›

In short, no. Having $20k saved up to move out is ideal, it gives you extra cash for deposits and whatever else you might need. However, you cannot intend to live on $20,000. To give you a different idea about how much that is, that averages about $9 an hour, which is hard to live on.

How much money should I have saved by 25? ›

“Ideally, your savings should reach $20,000 by the time you turn 25,” says Bill Ryze, a certified Chartered Financial Consultant (ChFC) and board advisor at Fiona. The national average for Americans between 25 and 30 years of age is $20,540.

How much money should I have saved by 30? ›

If you're looking for a ballpark figure, Taylor Kovar, certified financial planner and CEO of Kovar Wealth Management says, “By age 30, a good rule of thumb is to aim to have saved the equivalent of your annual salary. Let's say you're earning $50,000 a year. By 30, it would be beneficial to have $50,000 saved.

What is the 50 30 20 rule? ›

Those will become part of your budget. The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals.

How to budget when you first move out? ›

One rule of thumb is to follow the 50/30/20 rule—plan to spend 50% of your income on fixed expenses such as housing, utilities, transportation and insurance, and 30% on variable expenses such as groceries, entertainment, and miscellaneous. This will leave 20% for savings and emergencies.

How to leave a toxic household with no money? ›

How to Move with No Money
  1. 1 Relocate to a town with a low cost of living.
  2. 2 Apply for a driveaway company.
  3. 3 Move to a place with a relocation initiative.
  4. 4 Borrow a friend's car.
  5. 5 Move with a friend.
  6. 6 Lease a sublet.
  7. 7 Couch surf at someone else's place.
  8. 8 Stay at a hostel temporarily.

Is $2000 enough to live off of? ›

Retiring on a fixed income can seem daunting, but with some planning and commitment to a frugal lifestyle, it's possible to retire comfortably on $2,000 a month. This takes discipline but ultimately will allow you to have more freedom and happiness in your golden years without money worries.

How much money should I save up before moving out? ›

A general rule of thumb is to have three to six months' worth of living expenses saved up in case of an emergency. As movers with 30 years of experience, we can say for sure that sticking to your budget is crucial when living on your own for the first time.

What are 6 months of living expenses? ›

To prepare for income shocks, many experts suggest keeping enough money in your emergency fund to cover 3 to 6 months' worth of living expenses. So if you spend $5,000 per month, your first emergency fund savings milestone should be $2,500 to cover spending shocks.

How much money should I have saved before getting an apartment? ›

How much should you save up for an apartment? As a general rule, you should have at least three times your rent saved before moving into a new apartment. That means that if you're looking to rent an apartment that's $1,200 per month, you should have at least $3,600 saved for rent.

How to financially prepare to move out? ›

Here are some steps to help you get started:
  1. Review your finances & create a budget. ...
  2. Check your credit. ...
  3. Discuss your plans to move out with your parents. ...
  4. Practice paying living expenses while still at home. ...
  5. Build an emergency fund. ...
  6. Find a place to live. ...
  7. Set up utilities. ...
  8. Investigate renters insurance.
Oct 12, 2022

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