How to Pinch Pennies When Relocating to That First New Apartment or Home of Your Own   

Moving away from home for the first time can be a terrifying yet exhilarating experience: granted, your current “nest” with parents/relatives may be cozy and safe, but you’re bound to feel at some point that it’s time to strike out on your own, and maybe feel the delight of freedom. This momentous step will impact every single area of your life — including your pocketbook.

Whether you’re starting out with very little, and plan on surviving off of ramen for the foreseeable future, or you’ve been saving for a while and are thus starting off with an advantage, either way, the big move  comes with a number of expenses that can rattle even the best penny-pincher. Don’t panic and ditch your plans though — there are ways that you can become that independent woman and still remain confident about your financial plan.

Start Using the “B” Word: Budget!

Although it’s not exactly fun, smart budgeting will be your biggest ally when making your move to a new place — especially if you do it before you head out or even begin looking for your new home. Knowledge is power, and the more you have before trying to make it on your own, the better you’ll feel. So here are some tips:

• Have no idea how much something costs? Don’t be shy; ask your parents and friends how much their gas, electric and water bills are and how much you should budget for each. Or contact the chamber of commerce in the town/city to which you’ll be relocating, and ask if they can provide contacts/referrals to help you obtain this information.
• If you are planning to live somewhere that has four seasons, and therefore your electric/heat/AC bills will fluctuate significantly, always plan high. In other words, if you are told your gas bill could be anywhere from $50-$100 a month, always plan on it being $100.
• Be sure to leave yourself some “fun money,” and try to put a little in your savings every month.
• Savings are different from an emergency fund, which is equally, if not more, important.
• If you have irregular income or earn tips and commissions that are hard to count on, base your budget off your lowest-earning months in the last six months or prior year. This allows you to know you always have enough to cover the necessities — and then anything you earn over and above that base amount can be put toward fun money, extra savings, vacation funds or additional debt pay- off.

For the first while after the move, review your budget often and make adjustments as needed. There’s no exact science to doing this, and different budgeting methods will work better for different people: some people thrive on spreadsheets and “the envelope system” (putting cash in labeled envelopes for all of their expenses) while others are fine using online programs such as the aptly-named You Need a Budget (YNAB) or Mint.

The point is, it doesn’t matter how you do it, just as long as you stick to it. If you give yourself a strict budget and stay within its boundaries, you’ll be surprised at how much you can save each month and how much better you’ll feel.

Keep the Hidden Expenses in Mind

One thing is true: if you’re planning on moving out, you have to be ready to bring some cash to the table. Why?  Because moving out often comes with a number of hidden or unexpected expenses, especially when relocating to an apartment or condo: there are security deposits, pet fees, application processing fees – the list goes on and on.  (Trulia, the reputable all-inclusive real estate site, offers a great list of wow-I-hadn’t-considered-that extra expenses when renting an apartment. Elevator reservation fees…really?)

Another expense often forgotten?  Renters insurance. Even if your apartment complex or landlord does not require it, get it, and get it quick; as with car insurance, it’s important to make sure you are protected in case of a disaster. While catastrophes may not occur, you never know what could happen; all it takes is one faulty wire or one bad neighbor to damage your possessions — and your bank account. Home inventory websites such as knowyourstuff.org will help you itemize your possessions and ensure you know what needs to be covered, and Trulia provides an uplifting article about all the perks you may not realize you get with renters insurance.

A good rule of thumb about all of these hidden expenses mentioned above: make sure when first making contact with apartment complexes to ask what both the regular AND fee-based move-in costs are. Get a list of those costs from about five different apartment buildings.  Be sure to write them down. Then, once you have a better handle on the ballpark figure you should expect to put aside for these charges — in addition to the cost of gas/airplane ticket to get to your new locale, plus first month’s rent — you can decide if you need to give yourself extra time to save up before moving out. Planning ahead like this is worth it, even if it means delaying your plans for a couple of months: do not let these hidden expenses zap your savings completely!

Start Out Small, and Be Creative

There are no shortcuts when it comes to striking out on your own:  in the beginning, you have to start at the bottom (read small, “snug” apartment), and work your way up.  The effort to build your dream home can take many years.  So, to get started, there’s no shame in living humbly — especially when it’s your first place. Here’s how to do that:

• Live well below your means, and get a place that’s small and easy to maintain, even if it’s just for a year, before you find something bigger.
• Do not hesitate to take your family and friends up on their offers of hand-me-down furniture and other household items. Even the cost of small things like towels and sheets can really add up!
• You can also build a cute, cozy place with one-of-a-kind pieces for cheap by utilizing secondhand stores, thrift shops and garage sales.

Now comes the piece of advice you may not want to hear: put the credit card DOWN.  Really!  When you first move out, using your credit card to decorate and buy furniture is extremely tempting. However, it’s in your best interest to never carry a balance, to enjoy the great credit you will acquire by paying your rent on time, and to avoid having a credit card payment every four weeks. Think of  how much better you will feel, and the dollars that will accumulate by eschewing credit cards’ monthly fees. Stick to your budget and be creative; you will feel so much richer in the end!