With increased tough economic times, financial security has become a concern to many. This is not different if you have a mad ambition to move out and live independently. With the huge freedom however, there is a huge responsibility to be borne. Here are some helpful tips to guide you on how to save money to move out.
Budgets are friendly
Up until the thought of moving out cropped up, one is oblivious of the bills that are involved with living on their own. Let’s face it; it is bliss to live without worrying on how much goes into setting up a table for dinner. The risk of being in oblivion is that you will not be able to meet your expenses and hence fall into a financial rut.
This is where budgets come in. The best part is that they don’t have to be complex at all. Start with drawing a few utilities on a paper every week. The aim is that you are able to familiarize with the expenses so map them out and put a monthly estimate of your needs.
Of key is that rent will take the biggest proportion of your money. As such, get out there and find a suitable apartment and incorporate the cost within your budget. Soon enough, you will be able to come up with a personal estimate on which you can base your savings.
A great strategy when it comes to budgeting is the 50/30/20 rule. This is a simple guide on how to proportion your income. The 50% represents the fixed expenses such as rent, insurance and loan payments. This typically take on huge proportions and cannot be minimized as they are constant month on month.
The 30% is for any unforeseen eventualities and goes to emergency funds. The other 20% is for entertainment as a pat on the back for the good work. Sticking with this is a good prompt as budgets can be really good allies.
Read more on how to budget.
Maximizing your earning potential
The decision to move out gives many apprehensions basically because it involves a huge chunk of money. You do not want to be at the mercy of your friends and family asking for a small bail out to fit your bills. The silver lining is that you have an incentive to work for an extra coin.
Get into part time job opportunities if you are in school, dodge a bullet into small tasks that cumulatively add onto your bank balance, put out stuff that you are no longer using on sale and take advantage of online opportunities.
A useful tip is to have a timeline on when you want to move out and progressively work towards achieving this. This will also help avoid doing the heavy lifting and biting more than what you can chew when it comes to performing tasks.
Build on your contingencies
Saving for a rainy day is a popular sentiment and this is not different when it comes to moving out. Having an emergency fund is one of the best nuggets to go by as it will give you the necessity on which to base your savings.
A minimal amount such as fifty dollars a month can be a great building block towards the emergency pool. Not only will this prevent running dry when times have proved tough but will also cultivate the culture of saving. Slowly and steadily, you will be able to accumulate a pool that you can use to cater for other bills such as utility on moving out.
Read more on how to save.
Minimize your spending
It can be very tempting to reward yourself after hard work. I mean every good dog deserves a bone, right? The goal here is however a reward in itself because soon enough you will be living by your own and you can have a mini spree of refreshments under you own roof. This is the time to put off expensive vacations, shopping sprees, random night outs with friends and the nice costly gadget that you have been eyeing since last year.
Tempting as these ideas are, you will be thrown off the radar and consequently not be able to move out. Remember, we are not advocating for you to be a miser but to be cautious of your spending habits as these are hard to kill. Instead of the night outs that would involve eating out, fuel and refreshments, how about getting a snack and engrossing in a binge worthy series at the comfort of your bed? Further, there are many offers that come up and taking advantage of this will help minimize on spending.
Invest in your savings
While its good to work hard, working smart goes a long way. Putting your money in an interest earning account will help increase your returns. Instead of having money lying idle in the bank, you can have it in accounts such as savings account and fixed accounts that offer promising returns.
Once you have the preferred time of moving out in mind, you can put your money in such accounts. Fixed accounts will put the money away for a preferred amount of time where you cannot access the funds. The reward will be the incremental income that was obtained when the money was lent out.
Read more on investing.
Have automatic transfers
For many, saving can be a horrendous habit that they cannot uphold. One tactic to help with savings is to put a standing order where your bank automatically transfers the written amount to the account. This not only helps save but makes the activity automatic involving less rationalizing.
Refrain from committing to monthly subscriptions that debit your account balance. If possible, cancel the subscriptions that do not have much value and emails that are potentially withdrawing from your account month on month.
Some apps like TrueBill will help you monitor your spending, cancel your unwanted subscriptions, and even negotiate some bills for you.
Moving Out Is A Conscious Decision
Your concerns and apprehension due to moving out are completely normal. Taking that leap would mean careful planning and saving and with these tips, moving can be actualized.