It’s time to leave the safety of the nest. You’ve probably been dreaming about this day for a long time or maybe your parents just want you to learn to live on your own and are giving you the boot. Either way, you’re young and ready to evolve into the independent, budgeting citizen that you’ve always aspired to be. However, as with any important financial decision you’ll make at some point or another, you’ll need to take every possible expense into consideration if you’re going to make it on your own in the world today.
Remember, most landlords will check your credit before letting you move in.
Making a budget for any situation is important, especially when it comes to moving out. There are a ton of things that you need to think about when it comes to both saving money and spending money when you first move out on your own.
- Are you in school part time or full time?
- Are you working full time?
- Are you going to have a roommate to share the rent?
- Are you already equipped with stuff to make your new dwelling livable?
- Or, are you literally going at it with nothing and eating ramen noodles, sitting cross-legged on the floor?
Making a Basic Budget
We’ll make a rough estimate for all factors here, as every expense you’ll have is obviously going to vary depending on the location of your apartment, your roommate(s), if any, the income you’re making presently, etc.
Let’s say, for the sake of argument that you’re living alone. True, having a roommate can be a great help financially, but maybe you haven’t found one you trust, or just plain prefer your privacy. You’ve found a decent 2 ½ on the outskirts of town with creaky floorboards, a cramped kitchen, and stomping neighbors, but a perfectly affordable $500 a month in rent. Hopefully, heating and hydro are included. You’re one person, so you won’t go through much food and toiletries, we’ll say $60 a week on groceries and general things ($240 per month). Do you need the internet? If yes, tack on another $40-50 per month ($480-600 yearly). Maybe you’re bussing everywhere to save on car costs. Depending on where you live, if you’re a student (age 18-25) it’s about $50 per month. If you’re paying a regular fare, closer to $80. That’s $600-960 on transport alone, and remember that fares will likely go up every year. If you’re really lucky, you’ve got a job where you can work from your home computer, but you’ll still need to get to and from the grocery store.
That’s about $1,800-2,300 a month on the things that are pretty much going to be necessary. Now, you are young, so we’ll assume you’re not making much more than minimum wage, between $11-15 hourly, depending on which province you live in. If you’re living alone, working full-time (35-40 hours/week) is a must. We’ll say 40 hours a week, which comes to $1,760-2,400 a month before taxes. Even if you manage to cut back on things like your internet service, you won’t have much left over for anything else you might need, and you’re trying to set aside money for the future, aren’t you?
Cutting Corners and Living Below Your Means: Money Saving Tips
If all these basic expenses haven’t dampened your spirits, and remember that these are only the basic ones, then it’s time to start saving and making money when you can, however you can. At the very least, living below your means will see that you learn the most creative ways possible to get by.
1. Keep A Look Out For The Extras
Like we said before, you don’t want to end up eating noodles, sitting on the floor, staring at the wall. So, prior to moving out, keep watch for anything that your family and friends might be trying to get rid off. Old TV’s, DVD players, lamps, cookware, appliances, and other kitchen supplies, used couches and other furniture can go a long way in furnishing your new place at a relatively low cost. Hopefully, you can get most of that stuff for free. If not, check out any used goods websites for cheap stuff people might be selling in your area.
2. Sell Off The Unused Stuff
Speaking of used furniture, VarageSale, Kijiji, and Craigslist are a budgeting newbie’s best friend when you’re trying to save as much as possible. Simple, but effective, sell away any unused stuff. Yes, you will most likely get nothing close to what you were hoping for, or what you originally paid for the item, but even a few dollars here and there will afford you a box of spaghetti and a can of tomato sauce.
3. Buy and Cook in Bulk
Moving out won’t just mean cutting back on take-out and restaurants. We mention this one a lot, but it’s essential, just remember that you need to save room in the budget for some Tupperware. Head to Costco, and buy as many cheap food items as you can in bulk and dry foods/non-perishables such as pasta, rice, sauces, and canned goods. Make yourself a large pot of chili or spaghetti sauce and freeze it in portions.
For a look at how much the average Canadian spends on groceries, click here.
4. Shop at the Dollar Store
You obviously aren’t going to find fresh produce or brand name items here, but for the really basic supplies, the Dollar Store is a good place to go. So, if there’s one in the area, head over when you need household stuff like cleaning products, cheap kitchen supplies, and bathroom items. They’ll even have cheap utensils and dishes that you can use until you can afford better quality stuff.
5. Cut Back On Things You Don’t Need
Needless to say, that gym membership should go out the window, at least for the first little while. If you need to stay fit, buy some exercise DVDs and workout at home. You will definitely find some programs that don’t even require weights. This way, you can at least burn some calories until you can afford to start going back to the gym. Depending on which facility you go to, by eliminating that membership, you’ll likely save $10-70 a month.
Downgrading to a more basic cell phone package and forcing yourself not to use your data willy-nilly can be a great way to afford an all-inclusive internet package. That way, you can just wait until you get home to browse celebrity gossip. For that matter, unsubscribing to any membership that is costing you can help out. Depending on your provider, you should be able to negotiate a simple package with Canada-wide calling, unlimited texts, and 1GB of data for around $50-60/month.
Yes, the convenience of having a car can be amazing, especially when it’s cold or rainy outside, or when you’re late for work. However, depending on the model, that car can always be a huge expense. Gas alone could cost you upwards of $150 per month, insurance and registration can be taxing, and unless you know how to change spare parts yourself, going to a mechanic to fix all the little things that go wrong can be a destroyer of savings. Even if you can’t get rid of your mom’s old sedan, at the very least you should buy yourself a bike, and bus or train to work whenever possible.
6. Find a Job With Benefits
Another whopper of an expense? Maintaining a healthy smile. Unless you’re going to an underground dentist in an alley somewhere, you’re probably going to pay at least $180 every time you get your teeth cleaned, if you’re getting them cleaned at all. For this reason alone, finding a full-time job with benefits can be a huge stress reliever. Not to mention, many places will provide employment insurance, in case you should fall ill or lose your job.
7. Save Your Change
Another way to pile up a bit of cash here and there? The change jar. You would be surprised how much extra cash you can scrounge up in desperate times, just by scooping the change out of your pocket at the end of every day. Let’s say you scrape together $1-2 every day for a year. At the end of that year, you could have between $365-730 extra, assuming you don’t dip into the jar too often.
Expect The Unexpected: Making A Rainy-Day Fund
When you’re moving out for the first time, even when it’s with a roommate, there are a lot of things that you’re going to have to cut back on in order to remain afloat and make ends meet. This also means that you’ll need to save, not only for the future but as an insurance policy in case anything should go wrong. It’s recommended that you have 3-6 months worth of your normal living costs set aside for any such emergency, more if you can make it happen. So, to be safe, we’ll assume you’re within the $1,800-2,300 per month range for all your basic necessities. You end up unemployed, get injured or sick for the maximum period, 6 months. That’s $10,800-13,800 just to cover basic expenses for that period of time. So, before moving out, really be certain that you can afford this during an emergency situation, and remember those are just the basic expenses you’ll have to cover.
For Loans Canada’s Essential Guide for Saving, click here.
As Long As You Don’t Overspend, You’ll Survive
With all these numbers being thrown around, the prospect of moving out while working a minimum wage job can now seem a bit nerve-racking. However, don’t fret, it is possible to get by. In fact, if you do find this prospect a bit worrisome, that’s a sign that you’re taking the situation seriously, and there’s a greater chance that you won’t end up making the mistakes that so many others make. Moving out and dealing with all these expenses on your own is certainly not easy and shouldn’t be taken lightly. Remember, you’ll be spending hundreds of dollars a month on just a bare-bones apartment, so you need to start making smart financial choices. But, it can be done, as long as you’re learning to be money-savvy and you’re willing to work hard for it.