Chapter Twelve: On Your Own
Is it time to move out of your parents’ house? Whether you are heading off to college or you are paying for your own place, it can be an extremely exciting time. This is not a decision you want to make lightly, however, because moving out of your parents’ home before you are financially ready can set into motion a huge series of events that may put you in a bad financial position for years to come.
Making the Decision to Leave
How do you know it is time to move out of your parents’ house? Sometimes it is an obvious choice, such as when you are heading to a college far away or your parents ask you to move out. For some people, though, moving out of your parents’ home may just feel like the right thing to do. You may feel as though it is time for you to move on to the next chapter in your life, and moving out on your own is the logical step.
Talk to your parents about your intentions to move out. They may offer valuable advice to help you make your decision. Just be sure you aren’t making this decision for the wrong reasons. It is one thing to move out because you want to live on your own when you have the financial means to do so, but it is another thing entirely to irrationally move about because your parents have made you mad. It is far better to be prepared — mentally and financially — for this huge next step.
You will know you are ready to move out of your parents’ house when you have the ability to pay your own way. This means you have already written a budget based on how much money you will need to live on your own and your income is secure, whether from your parents or from a job. Keep in mind that living on your own is a lot different than living under your parents’ roof. Take into consideration that there will be a lot of expenses you may never have had to worry about before, such as an electric bill, water bill, and other common costs associated with living on your own.
When you leave your parents’ home, do it with some savings intact and a realistic budget already written. You will need to work extra hard to watch your spending to make sure you can cover all your expenses, especially in the beginning when you are learning how much money you actually need.
Remember: Unless your parents have asked you to leave the house, there is no reason why you shouldn’t stay if you are attending a local college, or if you don’t have enough money to support yourself right now. No, you don’t want to live with your parents forever, but there is no magical birthday that automatically signifies it is time to pack up and leave. This is something you should talk to your parents about. Discuss what your goal is with regards to moving out, and then come up with a financial plan to make it happen. After all, think about how much easier it will be to move out of your parents home after you have spent six months or a year working and saving up for your move.
What type of expenses will you have when you move out that you may not have right now while you live with your parents? Here is a brief list:
• Rent
• Utilities: Electricity, water, phone, and other necessary utilities
• Insurance: Health, car, renters, or homeowner’s
• Food
• Repairs
Remember: Unless your parents agree to help cover the costs associated with living on your own, you will be solely responsible for any bills that need to be paid. You might be amazed at how quickly expenses add up when there is no one else to loan you money. Ask your parents to sit down with you and discuss the various expenses you may encounter that you might not be expecting.
The Current State of the Economy
Due to the recent decline in the economy, many teens are staying at home longer, and many college graduates are returning to their parents’ homes because they are unable to find jobs. Before you venture off on your own, it’s important to have a plan for how you will bring in income and know that you can cover all your expenses. Even college students who earned degrees in typically high-paying careers are being forced to return to their hometowns to live with their parents until a secure career becomes available.
If you think you’re ready to carve your own path, talk with your parents first about their suggestions.
Budgeting Worksheet
Use the following budgeting worksheet to plan for expenses you might encounter once you move away from home.
|
Income |
Expenses |
||
|
Your pay |
$ |
Rent |
$ |
|
Money from parents |
$ |
Utilities (phone, gas, electric, and cable) |
$ |
|
Tips |
$ |
Insurance (home, auto, life, and health) |
$ |
|
Other income |
$ |
Food (eating out, ordering in, and school food plan) |
$ |
|
|
$ |
School supplies (pens, paper, and notebooks) |
$ |
|
|
$ |
Clothing |
$ |
|
|
$ |
Auto (gas and maintenance) |
$ |
|
|
$ |
Cell phone |
$ |
|
|
$ |
Health (medical, dental, and over-the-counter medications) |
$ |
|
|
$ |
Entertainment (movies, concerts, and music downloads) |
$ |
|
|
$ |
Gifts (holidays and birthdays) |
$ |
|
|
$ |
Savings account (try to save 10 percent of income) |
$ |
|
|
$ |
Emergency fund/ incidentals |
$ |
|
|
$ |
Other expenses |
$ |
|
Total |
$ |
Totals |
$ |