By Christopher Haymon, Guest Blogger
Although there are some benefits to living on their own, a study of recent statistics from the Pew Research Center shows that young people are moving out of their parents’ homes later in life. While the reasons for living on your own may vary, there are certain things that you’ll need to pay attention to when living independently.
Choose the Right Place
Once you’ve decided to live on your own, you’ll have to make sure you’ve chosen the right place. According to Tough Nickel, young people have several things to consider when getting their own place, which include setting a rental budget based on your affordability, knowing what questions to ask a prospective landlord, and putting together the documents needed to prove that you can afford the rent. It will also be important to know your credit score and how the rental approval process works. The payment of utilities may be a new responsibility for you, so be sure to factor that into your budget and ask the landlord which utility bills, if any, are included in the rent. A clear idea of the costs involved may limit your housing options, or it could mean you’ll have to consider finding reliable roommates.
Keep Yourself and Your Property Safe
Now that you’re living on your own, you have sole responsibility for your safety. You can do that without spending too much money, such as ensuring you have appropriate lighting on the outside of the property and negotiating with the landlord to get new locks on the doors. It’s also advisable to install deadbolts on the doors. Another suggestion is getting to know your neighbors so it will be easier to identify a stranger. Additionally, if the property doesn’t come with a fire extinguisher, you should consider investing in one, as well as learning some basic fire safety skills.
Buy Life Insurance
It’s always a good idea to prepare for the unexpected. If you plan to have a family, you’ll want to make sure they’re financially secure when you pass away. That’s where life insurance comes in. There are different types of insurance plans, including whole and term policies, but they share the same end result: Financial assistance is given to your family to help pay off debts and funeral costs, as well as make up for lost income. Shopping for insurance can seem overwhelming, but fortunately, online calculators make it simple to choose the right coverage for you. Once you get an idea of rates, you can then buy insurance online instead of in-person.
Make Sound Financial Decisions
While you may have created budgets before, things are likely to be different now. You may have new or increased expenses such as food, travel, rent, and utilities. It’s best to create a new budget that will accurately show what your expenses and assets are. This budget will include monthly and other unscheduled expenses such as utility bills, which are monthly, and insurance payments, which might be quarterly or semi-annual. Your budget should make allowances for an emergency savings fund as well as long-term savings. It’s best if your budget is flexible, as having a rigid budget can affect your ability to adhere to it, and you’re more likely to blow your budget on unplanned fun activities. Above all, you need to make sure the figure you have allocated to each item in the budget is accurate so as not to throw things out of whack. You should manage how you use your credit card and protect your credit score.
Consider Your Next Move
In most cases, the next thing on the to-do list after moving out is to buy your first home. Doing this requires long-term planning, and you’ll need to decide where you’d like to live and the type of housing you’re interested in, as well as investigate your loan options. Many first-time homeowners choose to take out a FHA loan because these types of loans have less stringent credit and income requirements, and you may be able to buy with a down payment as low as 3.5 percent).
Once you have an idea of how much the home will cost, you’ll have to start saving toward the costs associated with buying a home such as the down payment and closing costs. When saving for your down payment, you may need to increase your income; this could include working overtime or taking on a side gig. You can also cut down on expenses by eating out less, carrying lunch, or cutting your cable package. Perhaps consider reverse budgeting, which is an aggressive saving strategy where budgets are built around how much money you need to save monthly to meet your goal.
Living on your own is a brave and exciting experience regardless of when you decide to do it. So, ensure you are making wise decisions that will keep you moving forward on this new path!