Before I moved out of my parents’ house, we agreed I could live there rent free on the proviso I saved around 50% of my wages.
Thanks to this arrangement, it meant when I was ready to move out, I had some cash behind me and wasn’t used to blowing my entire pay cheque every fortnight.
There were however still additional skills I needed to master if I was going to survive on my own. Here are some things I learnt along the way.
What you might pay for upfront
- Removalist fees to transport any furniture or boxes you may be taking with you, unless you’ve got a good mate with a ute that’s willing to lend you a hand
- Rent in advance and bond money which will vary depending on the size of the place you’re renting, if you’re moving in with other people and the suburb the property is located in
- Connection fees, such as gas, electricity, landline and internet. Note, depending on the type of property, the landlord may cover water, council and any body corporate fees
- Stuff for the home, such as furniture, electrical appliances, sheets, towels and kitchenware. If you’ve got lots to buy, look out for sales and second-hand deals on Gumtree and eBay.
What you might pay for on an ongoing basis
- Rent, which is likely to be your biggest ongoing cost. Figures show the average rate in Australia is anywhere between $165 and $440 per week per person1
- Groceries, cleaning products and toiletries
- Gas, electricity, internet, phone and water
- Public transport, taxi and Uber fares, and maintenance of your own vehicle
- Existing repayments, such as credit cards, education debt, personal or car loans
- Renter’s insurance to cover your stuff if it's damaged or stolen
- Medical and dental bills
- Entertainment and clothing
- Any subscriptions and memberships.
Things to do beforehand
More than 50% of Australians aged 25 to 29, who move out of their folks’ home, end up coming back—most of them within two years, with financial problems often the cause.2
To help ensure you’re move is a successful one, here are some money matters worth addressing before the big day.
Practice good money habits
Keep in mind, credit cards can be convenient but they’re often more expensive than other forms of borrowing, plus people tend to spend more than if they’re just using cash.3 For this reason, having an emergency fund can provide peace of mind.
It’s also worth setting up alerts or direct debit payments as this can help you to stay on schedule in terms of money that’s owing.
Consider the costs of having a vehicle
The average household in Australia is juggling car debt of around $19,500.4 The purchase price of a new car is one thing, but keep in mind the added costs, such as registration, insurance and servicing.
Think about higher education plans
According to research5, estimated lifetime earnings for those with degrees are, on average, higher than those who don’t go beyond year 11.
However, if you’re considering further education, ask yourself whether the field you want to enter is the right one for you as the average debt for a tertiary student in Australia is now about $19,100.6
Contemplate job security
If you think a job change might be in the works, it’s a good idea to have another gig lined up as you don’t know when another opportunity might come along.
Learn basic cooking skills
If you want to avoid spending all your money on takeout and delivery, or living on two-minute noodles every night, it’s worth having a few basic recipes under your belt—stir-fry, pasta, casserole.
Have a conversation with your roommate or partner
If you happen to be moving in with a roommate it’s worth discussing some things upfront, such as how you both plan to contribute financially and in regard to household chores and groceries.
Choose a property within your means
If you are ready to move out in the immediate future, to ensure you find a rental that you like and for the right price, be sure to investigate:
- Rental prices in the suburbs you’re interested in
- The distance from family, friends, work and study
- What local amenities are nearby—shops, restaurants, transport, medical facilities
- And, if you happen to be moving cities, how the job market, weather and crime rate stack up.
We’re here to help
Remember to update your details with your current providers when you move. If you need further help, our budget calculator can help you crunch the numbers and our tips on how to save without spoiling your social life may also provide some food for thought.
Moving out is an exciting time and if it also seems a little overwhelming, just remember planning ahead can go a long way.
5 http://media.corporate-ir.net/media_files/IROL/21/219073/AMP.NATSEM_32_Income_and_Wealth_Report_Smart_Australians.pdf (page 30)
Nearly one in two people plan on doing the same thing with the cash they get back from the ATO. What do you have in mind?