Hey everyone, I’m a 22-year-old college junior and wondering if I can afford to move out. My monthly income is about $2,890 after taxes. I’m putting 18% into savings, 6% into retirement, and paying off some loans each month. My other main expenses are a car loan and small subscriptions. Living expenses are mostly covered by my parents, so right now I only spend about $800 a month. What are some ways to get ahead financially? Do you think I’m ready to move out or should I keep saving up a bit more?
23 here and living solo. Do you have savings set aside? It looks like you’ve got around $1,200 left each month after expenses, but rent could eat a lot of that depending on where you live. And remember, you’ll need stuff like Wi-Fi, renter’s insurance, groceries, maybe even some furniture. If rent is high, I’d say keep saving up and try to pay down those loans first!
@Darian
Good advice, thanks! I do have about $10,000 saved as an emergency fund and some money in a Roth IRA. I’m planning to split rent with my SO, so my part would be around $500 a month.
Westley said:
@Darian
Good advice, thanks! I do have about $10,000 saved as an emergency fund and some money in a Roth IRA. I’m planning to split rent with my SO, so my part would be around $500 a month.
That’s solid. Having the emergency fund is key, especially if unexpected stuff pops up. Just make sure you’ve factored in utilities, groceries, and all the little extras. They add up fast!
@Darian
Do you think $10k is enough in the emergency fund or should they aim higher?
Avery said:
@Darian
Do you think $10k is enough in the emergency fund or should they aim higher?
It depends on how much OP’s monthly bills would be after moving out. But $10k sounds like a good cushion for now, especially if they’re still saving monthly.
Are you tracking all your expenses? I use Habit Money to keep tabs on all my spending and subscriptions. Those small charges like Quizlet and Xbox really add up! It’s helped me find extra cash just by cutting things I didn’t really need.
@Micah
Yeah, I try to keep my credit card balance under $1,600. I’ll look into Habit Money though, sounds like a good way to catch those little charges.
Westley said:
@Micah
Yeah, I try to keep my credit card balance under $1,600. I’ll look into Habit Money though, sounds like a good way to catch those little charges.
It’s a good idea, I use something similar and it helps me save a bit each month by pointing out stuff I forgot I was paying for!
@Micah
Wait, what’s Habit Money?
Darian said:
@Micah
Wait, what’s Habit Money?
Oh, it’s just an app that helps you keep track of daily expenses and reminds you about small charges so you don’t overlook anything.
Honestly, if your parents are covering big stuff like car insurance and health insurance, you could consider staying put for a year and saving more. Think about putting a bit extra toward that car loan to knock it out faster. That way, once you’re on your own, you’re not dragging around any debt.
@Bailey
Good call. The car loan is my biggest monthly bill right now besides rent, so getting that down would be a relief.
Westley said:
@Bailey
Good call. The car loan is my biggest monthly bill right now besides rent, so getting that down would be a relief.
Yep, interest on those adds up fast! Tackling it sooner is always a win.
I’d say, try living on a “trial budget” while still at home. Like, pretend you’re paying rent and other bills, and put that money aside each month. You’ll see how much it leaves you and if you feel comfortable with it!
@Emory
That’s a good idea, it’ll help me see if my budget can actually hold up once I add rent and groceries to it.
Westley said:
@Emory
That’s a good idea, it’ll help me see if my budget can actually hold up once I add rent and groceries to it.
Exactly! If you feel comfortable after a few months, then you’ll know you’re ready.
Just a tip… it might be worth setting up separate savings accounts for your emergency fund and regular savings. That way, you won’t be tempted to dip into it for random stuff. A high-yield savings account is a great place for that emergency fund too.
@Blake
I don’t actually have separate accounts right now, everything is just in my checking. I’ll look into that!
Westley said:
@Blake
I don’t actually have separate accounts right now, everything is just in my checking. I’ll look into that!
Yeah, keeping it separate makes it feel more ‘off-limits,’ if that makes sense.