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How to Budget for Expenses When Living on Your Own


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Moving alone for the first time is an adventure, but a whole new set of financial challenges come with it. It is essential that you do your research to make sure that you are prepared to cover the expenses when you live on your own. Here’s how to start thinking about budgeting when you’re living on your own for the first time.

Budgeting of necessities

Divide your monthly expenses into a 50/30/20 budget categorized into needs, wants and savings. Plan to pay more than rent alone. Factor in the following basic survival expenses into your monthly budget. Plan to spend about 50% of your income on these expenses each month.

Rental

When you decide to move out on your own, you usually plan on renting. Many renters follow the 30% rule, which says you shouldn’t spend more than 30% of your income on rent. It doesn’t work for everyone, however. Before you move into your first rental unit, you’ll need to pay the first and last month’s rent as well as a security deposit and tenant insurance. You’ll also want to consider moving costs and administration fees whenever you apply for rental accommodation. Finally, if you own a pet, be prepared for the additional fees and monthly expenses.

Utilities

Sometimes a few utilities are covered by your rent, but there’s a good chance you have to budget for utility bills every month. Be aware of major utilities which include water and sewerage, electricity, gas, and garbage collection. According to Money Under 30, heating and electricity bills can cost around $ 100 per month each, depending on the efficiency of your rental unit.

Telephone and Internet

Today, a cell phone and a good Internet connection are essential. You can find relatively cheap phone and internet plans if you don’t use too much data. Bundling these two services with cable can save additional money.

Transport

If you have a car, be prepared to budget for auto insurance, gasoline, parking, and routine car maintenance each month. Public transportation can help lower monthly costs, but it’s not free.

Races

We all have to eat. Groceries include all the items that make life comfortable, such as toiletries, cleaning supplies, and pet food.

Debt

Be prepared to pay off expenses like student loans and credit card debt each month.

Budgeting your desires

Wants to include all the items that make life good and the ones you can afford. Spend no more than 30% of your family budget on the following categories.

Purchases

Sometimes shopping can be seen as a need, like buying a new work outfit or a pair of winter boots. Then you have birthdays, holidays, and other special occasions that arise.

Entertainment

We love entertainment. Whether you’re going to see a stand-up comedy, watch a movie, or experience fine dining, set aside money each month for your outings. Other entertainment costs include subscription streaming services, video games, and ad-free music apps.

Gym

Fitness and health are essentials of life, but a gym pass is considered more of a luxury. If you’re a gym-goer or like to stream workout videos online, plan to add these monthly dues to your budget.

Trip

Travel might not be a monthly expense, but who doesn’t like exploring new places in the world? Make room in your budget for travel so you don’t miss out on those experiences in your life.

Savings

Making room in your budget for savings and investments will pay off in the long run. Having an emergency fund is essential to deal with the unexpected in life. Of course, we should all be saving for retirement and increasing our wealth through investments. Twenty percent of your income should be spent on savings. Check out the following tips to save on monthly expenses.

Budget for living alone

When you are living alone for the first time, spending can seem impossible to control. The following resources and techniques can help you take control of budgeting for a living on your own. When you control your life over your own spending list, you’ll feel better able to support yourself financially.

The envelope method

Every time you get paid, divide the money into separate envelopes for bills, savings, and fun things to do. The key is to stay away from your debit or credit cards. Once you have spent all the money in the “dinner out” envelope, for example, you cannot spend any more money in that category for the rest of the month.

Spreadsheet tracking

Tracking your budget on a spreadsheet is similar to recording the foods you eat on a diet. You don’t set limits like the envelope method; instead, the idea is to honestly examine where your money is going by tracking every penny you spend.

When you sit down and record your expenses on a spreadsheet, you may realize that you are spending a lot of money on eating out, for example. By seeing your costs, you can reduce your outings to restaurants, saving you a considerable amount of money each month.

Stay safe when you live alone

Finally, safety is the most important aspect to consider when moving alone for the first time. You may prefer to live in an urban or suburban area where neighbors can be there for you in case of difficulty and can keep an eye on your place while you are at work or on vacation. Having roommates can also be a practical choice. They not only offer a safer lifestyle than being on your own, but they can also help you lower your living costs.

It doesn’t matter your budget as long as you have a plan that works for you. You may need to try several budgeting methods before you find the right one for you. Either way, you’ll feel more confident in your move when you take the time to understand and prepare for expenses when living on your own.

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