A Finance Guide to Living on Your Own for the First Time
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Finances are scary. It’s not just that your paycheck doesn’t match your expectations; it’s the fact that you never know what tomorrow will bring, and financial instability can feel like a constant state of stress. When starting to live on your own, you have to pay attention to your money. Below is a finance guide to living on your own for the first time and before starting college.
1. Ensure Your Cash is Being Used Wisely
Living alone means avoiding the temptation to spend your money on impulse. Expenses like groceries and utilities should be accounted for each month. This will keep you from overspending. Even if you are not the best at saving money, that does not mean you cannot live alone. Setting a goal of saving $10 per week is a great way to start saving up for something in the future.
Minimize the expenses that you can. If the bills are mounting and eating away at your budget, try cutting back on luxuries like cable TV or the premium Netflix package. Instead, use free streaming services or a library card to access entertainment when you want it.
2. Set Aside Emergency Funds
Having all your finances in a savings account is never a good idea. The best way to avoid this is to have a “rainy day fund” for 3 to 6 months of living expenses. This will give you the flexibility you need if unexpected expenses pop up. It’s also important to limit the amount you are spending on credit cards and lines of credit to prevent yourself from getting into financial trouble.
3. Look For Affordable Housing
Students who live in apartments may have the cheapest housing, but it’s not the best choice for most people trying to afford the rent for the first time. As someone who lives alone, you should consider paying the rent with a roommate. Having a roommate will prevent you from paying the rent on your own and reduce costs.
The best option is to look for off campus student apartments and rentals if you are looking to save money. There are apartments ranging from one to four bedrooms and one story to six or eight stories. Look at your budget and ensure you can easily afford the rent for the first time since this will be your biggest cost of living on your own.
4. Have a Plan for Paying Bills Before Living on Your Own
Living on your own will cause you to have to pay bills. Preparing for these expenses before you even move out is a good idea. There are different ways that people organize their bills, and this will help you determine what payment method is best for you. Paying early can save you money in the long run. However, remember that interest and late fees may be added on top of the initial due amount, so it can cost you more than just paying your bill on time.
5. Learn How to Budget and Set Goals
Budgeting is the key to success in achieving your goals. Whether your goal is saving for a trip or paying off debt, you need a budget that will help you reach these goals easily. It all starts with tracking your spending. It’s not hard to quickly run a tally of your expenses each month before you open your bills and get ready to pay them. You can also use apps to make the process easier.
A budget will always help you to reach your goals. However, it is important that you also create short-term goals that will help you get to your long-term goals. For example, if you want to buy an iPad, track how much money is needed for the purchase and when it should be paid to achieve this goal.
6. Get a Part-Time Job Before Living on Your Own
Having a part-time job is the best way to make quick money. However, if you live alone, you should be sure to have a part-time job that can still allow you time for studies and free time to enjoy yourself. Try looking for jobs that don’t require much extra travel since this will reduce your gas expenses. An extra income source will increase your purchasing power and your ability to pay off debt and save for the future.
Conclusion to Living on Your Own for the First Time
There are many ways to plan your finances when living on your own for the first time. The most important step is to be smart with money and not get into debt. This means not spending money on shopping for clothes and instead spending it on college books and cheap meals. It’s important to create a budget and stick to it while saving up for mid-term goals. Remember that you can still live in an apartment with a roommate to help you save money.
