Moving out for the first time should be a fun and rewarding experience. However it can also be a dangerous financial trap if you are not properly prepared to deal with the host of new responsibilities you will be confronted with. Absorb the financial advice to below to better equip yourself for successfully navigating the journey of renting your first apartment.
Have 3 months living expenses resting in a savings account
There's a rather frightening statistic being ushered in hushed tones by the masses that the majority of us are only about 2 pay cheques away from living on the streets. The financial data to support this claim is not clearly documented but it still outlines the importance of preparing yourself for the possibility of losing your source of income at some point. Job security is never a certainty and in the current financial climate sudden mass lay-offs are not that uncommon. By having a 3 month savings margin you have created a time buffer that will allow you to continue paying your rent and food bills while you look for new employment.
Choose room mates with a reliable track record (if possible)
While this is not always possible it is a good idea to get an idea of the people you will be moving in along side. Even close friends will encounter some difficulties if they are sharing a living space together, so it makes sense to ensure that at least the financial aspect of your room mate's obligations will be met consistently and in good time. It should also be noted that it often only takes one unruly house mate to ensure that no member of the household will ever see their deposit cheque returned by the landlord.
Create a realistic budget then stick to it
The ability to successfully budget is one of the primary skills you must learn to survive when fending for yourself. This involves creating a detailed food budget – which will be your biggest expense outside of your rent payment. Shop around online to find the best offers for the products you need and consider buying long lasting foods that are currently on offer in bulk quantities to make significant savings.
Plan out your annual bills to reduce unexpected payments
You will have much more than simply your rent and food to be paying for. You should be aware of the average quarterly electric and gas bills in your area unless you are using a 'top up' card payment method for these utilities, which allow you to pay small top up amounts of cash as and when you need to. This style of payment allows you to keep tabs on the amount being spent on the utilities much better than one bill every 3 months does, so consider a switch to this payment method to reduce surprises.
It would also be prudent to remember the annual television license payment for example, which currently requires you to part with over £145 of your hard earned cash in the UK. Make a note of the various payments that you will encounter as the year progresses to enable yourself to properly budget your overall finances for these eventual hits on your wallet.
About the writer
Todd McCullough is an independent blogger and finance researcher. He writes financial advice and money saving themed articles for financing and loan websites such as www.wongabusiness.com.