When Should You Move Out of Your Parents’ Home?

Applying for a Mortgage, Mortgage Affordability, Mortgages

There’s a transition most young adults must face at some point in their lives: moving out of their parents’ home. And while you may end up back there for a stretch – if you fall on hard times or for another reason – it’s still generally not a great long-term arrangement.

You may be wondering if you’ve reached the point where you should consider finding your own apartment. And if that’s on your mind, it’s good to start planning for the future – today.

If it’s your first time considering moving out on your own, you likely have some worries. After all, it’s a huge change and one of the first major transitions of your life. We’ll discuss the details surrounding the decision to move out and everything you need to examine to be successful in your new independent life.

Signs That It’s Time To Move Out

The thought of being on your own might be exciting, but it’s a decision that should be weighed and planned before executing. It’s crucial to understand your finances, budget properly, make plans for new expenses and recognize how moving out might impact other long-term financial goals.

If you’re uncertain about taking the leap into full-fledged adult independence, there are signs to look for that might indicate the time to leave home has arrived:

  • Having too long of a commute
  • Not getting along with your parents
  • Needing to boost your social life
  • Craving the independence of adult life
  • Outgrowing a curfew
  • Being able to afford the cost of living
  • Wanting less restrictions
  • Having younger siblings who already moved out

There’s a long list of potential signs it might be the right time to move into your own place, but these are just a few to consider when thinking about a new living situation.

What Age Should You Move Out?

There’s no right or wrong age to consider moving out. The answer depends on your ability to afford the costs of living on your own.

As of July 2020, 52% of young adults ages 18 – 29 lived with their parents, the highest number since the Great Depression era.[1]

Factors like the COVID-19 pandemic, rising student debt and cost of living are just a few reasons why it may be harder to leave home than in past decades.

No matter your age, consider your financial situation and long-term goals before deciding on when to move out.

How Much Money Should You Save Before Moving Out?

It’s smart to save as much money as possible before moving out. As a rule of thumb, having between 3 – 6 months’ worth of living expenses is a good goal.

When preparing to move into a new apartment, you’ll need to thoroughly understand the costs associated with the process. Some of these costs may include:

  • Credit and background checks
  • Paying rent for the first month upfront
  • Security deposit
  • Furniture and appliances
  • Moving expenses
  • Renters insurance

These expenses will likely require thousands of dollars upfront. So make sure you’re prepared with the right amount in your savings account.

Another important financial point to consider is proving your creditworthiness to your future landlord.

They’ll review your credit score, work history and likely request a background check. If your score isn’t ideal, it’s time to work on improving your credit score before looking for a new place.

You’ll also need to provide proof of employment with documents, such as W2s or pay stubs, to confirm you have stable employment.

Credit Score Requirements

Most apartments will require a credit score of around 650 and above to approve your application.

What is your income?

The average monthly expenses for one person in the United States is $3,189, totaling $38,266 annually.[2] This number can vary greatly depending what area you live in. For example, living in New York City will be significantly more expensive than living in Little Rock, Arkansas.

Your net income (income after taxes) should be enough to cover your cost of living at a minimum – making a little extra as a safety net would be even better. Living within your means is a valuable skill to learn and practice. Your financial situation depends on your ability to properly manage money independently.

What are your current expenses?

Get an idea of what your expendable income looks like after deducting all your monthly expenses – like car and insurance payments, student loans and credit card debt. You’ll feel much more comfortable with a little wiggle room at the end of each month rather than barely scraping by.

While a healthy amount of emergency savings is always beneficial, having a sufficient and consistent monthly income is vital to financial stability after you’re out on your own.

How Should You Get Ready To Move Out?

When you’re ready to move out of the family home, there’s some initial preparation you’ll want to do. Creating a detailed game plan can help mitigate stress and result in a smoother move-in day.

And don’t forget that moving out is a process. Including a plan to care for your mental health is a great way to help make the change easier. Consider the after effects you might feel once you’re moved-in and living on your own.

Build a move-out timeline

From the first time you start browsing rentals or apartments to move-out day, the process takes a significant amount of time. Procrastination at any step can make an already nerve-wracking situation even more difficult.

Build out a long-term plan that prepares you for everything from the apartment search to setting up utilities and moving into your new place.

This timeline includes important steps like:

  • Saving up money
  • Optimizing your credit score
  • Finding a roommate
  • Searching for an apartment

Build a career plan

If your current income barely covers your cost of living, develop a long-term career plan to meet your needs.

Consider asking yourself these questions:

  1. Do you expect any promotions or openings at your current employer?
  2. How can you increase your monthly income?
  3. Are there opportunities in the job market for you to increase your pay?

If you move while the job market is hot, you have a chance to find more opportunities for career changes and advancements that can lead to a higher income.

Finding a roommate

While some may scoff at the idea of having a roommate, you can significantly reduce your expenses by splitting them with another person (or multiple). Dividing monthly rent and utilities can easily save you hundreds, if not thousands, each year.

There are plenty of ways to go about finding a roommate.

First, check with your friends to see if they or anyone they know is looking for a roomie. If you don’t have any luck with that strategy, check out online platforms like Craigslist or other websites where roommates can connect.

Make sure you do your due diligence. Ensure a potential roommate is trustworthy and respectful before you decide to live together. You may feel more comfortable if they have references you can call for confirmation.

How Do You Budget for a Move?

Moving out can come at a high price.

You’ll need to prepare for all the expenses that come with moving. This includes getting days off work, paying the security deposit and first month’s rent, along with the costs to pay movers and get packing supplies – think boxes, tape, cushioning for breakables, etc.

Add all these up so you have a concrete number to target with your savings goals.

Security Deposit

A payment made to a landlord or management company to protect them from the costs of potential damage or losses, like stained carpeting or missed rent payments.

How Do You Budget After a Move?

There are many things you’ll need to include in your budget that you didn’t have to think about at your parents’ house. These ongoing monthly costs can add up quickly. Use this cost of living calculator to determine your monthly expenses.

Here are a few costs you’ll need to add to the budget once you’re on your own:

  • Electricity
  • Gas
  • Internet
  • Groceries
  • Water
  • Entertainment
  • Car insurance

These are some examples of bills you’ll need to pay each month, but it isn’t an exhaustive list. Be sure to plan for surprises, like your car breaking down or an emergency visit to the doctor.

Building an emergency fund for unexpected expenses will help keep you from taking out credit cards or loans to cover the inevitable.

Will Moving Out Mean Moving Up?

Moving out is certainly exciting and appealing, but it’s important to understand the financial implications and responsibilities of such a significant lifestyle change.

Consider the impact moving into your own place can have on your long-term goals and ensure your income and savings can support your living expenses. If it’s not the right time, don’t worry – re-evaluate your situation in a few months.

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