Do I Have Enough Money to Move Out?

People usually want to move out of their parent’s homes in their late teens and early 20s. However, it’s so hard to do that these days because of the high cost of living and especially rent. Are you wondering how much you need to save up to be able to move out? Believe it or not, about 50% of young people are thinking the same thing.

Saving up money is one of the top reasons people give for why they still live at home. And saving takes time and focus. But, if you’ve been at it for a while and you’re asking yourself, “Do I have enough money to move out?”, the answer might finally be yes.

Why Is it So Hard to Move Out?

According to the US Census Bureau, over half of young people aged 18-24 and about 15% of 25-24 year olds are still living at home with their parents. These rates have been climbing since the 1960s and peaked during the COVID-19 pandemic, which added another difficulty to moving out. 

There are a lot of reasons why people live at home now, more than in the past 60 years. People are getting married older, so they are less likely to move out and live with their spouses. Post-secondary education is more and more important, and more expensive, so more people are staying in school longer. 

But, of course, the biggest reason is money…

For most young people, buying is out of the question. And, rent is higher now than it has been in the past 80 years, even adjusted to the current rate of the dollar. On average, Americans pay $600/month in rent, though this differs depending on the state and city you want to live in. So, the biggest reason why people are still living at home is because rent is high, and they need time to save up money.

How Much Do I Need to Move Out?

Obviously, different people have different lifestyles that they’re used to and want to maintain. So, I can’t give you a set number and say, “If you save $XXXX, you’ll be able to move out of your parents’ house.” Instead, it makes more sense to look at income versus expenses to see if you can afford to live on your own successfully.

So let’s look at the expenses of moving out that you’ll need to be able to cover.

Rent

The average rent in the US these days is about $600/month, but that doesn’t necessarily mean this is what you’ll pay. In smaller cities, you’ll be able to find a room or an apartment for less. In big cities, things might cost a whole lot more. It all depends, of course, on what kind of place you want to live in.

But here’s a rule of thumb. In general, your rent should be not more than 30% of your monthly income. If it’s more, you’ll find yourself struggling to make ends meet every month.

When you move into a rental property, you need more than just the monthly rent. It’s normal to pay the first and last months’ rent, plus a security deposit. This normally works out to three times the rent. So for a $600 place, you’ll need $1800 saved up and ready to put in your landlord’s hand.

Utilities

And we’re just getting started with the costs of living on your own. Along with rent, utilities are another big cost and one you might not be used to covering. You’ll need to pay for water, electricity, heating, and definitely Internet costs to live a whole and complete life. 

These utilities will normally add up to 5-10% of your monthly income. There might also be some initial costs involved in getting utilities set up for some properties.

Groceries

You may already be paying for your own groceries. However, when I was still living at home, my parents usually shelled out for food, and I only ended up paying for a few things here and there. They were used to taking care of me and wanted to continue to help while I saved money. But also, so they could have the place to themselves ASAP.

Groceries will account for a big part of your living alone expenses. This includes your food and also things like toiletries, cosmetics, and that all-important toilet paper. Your groceries will eat up 10-15% of your monthly income, which can be a pretty big chunk.

Insurance

Some properties may require you to hold renters’ insurance, also known as tenants’ insurance, to rent them. Or, you may just want to take out insurance on your own. 

This insurance is sort of like homeowner’s insurance and protects you in case your belongings are destroyed in a fire or stolen, or if the apartment you’re in becomes unlivable. For an apartment, you’re probably looking at just $20 or so per month or $240 per year.

Misc.

This doesn’t rhyme with ‘disc’. I’m talking here about the miscellaneous expenses of living on your own. These are the things that are little bits and bobs that don’t really fit into other categories. But, as you will learn when you’re living on your own, there are always unexpected costs that pop up when you least expect them. 

This can be things like medicine when you’re sick, cleaning supplies, fish food, and a new charger for your phone. People normally budget 5-10% of their income for miscellaneous expenses.

Emergency Fund

If you’re really serious about making it on your own, consider saving up a lump sum for what I call an “emergency fund.” This is money that you save up and don’t touch unless it’s an absolute crisis. This can mean a medical issue or loss of a job, but not for anything made by Gucci. When you’re young and flexible, about $1000 in your emergency fund should be enough to bail you out of most problems.

Do I Have Enough Money to Move Out? 

Let’s look at a sample budget for living alone. Say you find a great apartment for $600 in a decent building and a cool part of town. And, let’s say you’re your job pays you $2800/month or $33,600 per year. Here’s what you’ll need to have saved up in advance and in monthly income to be able to afford it.

You’ll need to put down $1800 to start renting the place, and $1000 in an emergency fund. At 10% of your income, you’ll expect to pay about $280 in utilities. If you budget 15% for groceries, you’ll need an extra $420 to cover them. Add $20 for insurance, and maybe $200 for miscellaneous expenses (7%). 

So, by the end of the first month, you’ll need to pay:

For a total of $1520. This is only 54% of your salary, so you’ve done it. Do you have enough money to move out? Well, if the numbers above are doable for you, congrats! It looks like you do, and you’ll still have enough income to enjoy life and save, too.

Be careful, though… 

If your apartment and expenses are all this high, but you’re only making $1800/month, you’re going to find it almost impossible to keep your head above water.

Need Help Finding A Place To Live and How To Save Money?

Well, then check out our guides on the Cheapest Places to Live in Georgia, the Cheapest Places to Live in North Carolina, the Cheapest Places to Live in Texas, the Cheapest Places to Live in California, and the Cheapest Beach Towns in Florida in 2023.

Also, have a look at our advice on finding Free Gym Membership for Low Income People, Free or Cheap Furniture for Low-Income Families, Free Glasses for Low-Income People, Free Laptop for Low-Income People, Free Internet for Low-Income Families, and Free Glasses for Low-Income People to help you save money.

The Honest Answer

When you’re wondering if you have enough saved up to make it on your own, you have to be honest with yourself. Do you have a secure job? Have you saved up enough to pay for three months of rent plus an emergency fund? Is the place you’re planning to rent really in your price range?

However, keep in mind that there are also many ways to make moving out cheaper. Sharing with a roommate is possibly the best way to be able to move out without lowering your living standards. But, if you think you have the money you need and a steady job, then maybe now is the right time.

Until next time, good luck with finding a fantastic place to live.