Seven Financial Rules for Living on Your Own for the First Time

young woman eating pizza in her kitchen

There are a lot of transitions you make as you grow up and take on more personal responsibility. It starts the first time you pick out your own clothes and only gets more complicated from there.

One of the most difficult transitions you can make is when you move into a new home all by yourself. No family. No roommates. Just you.

Living alone can be difficult for a lot of reasons, but managing personal and household finances by yourself is often the biggest stumbling block for first-time independents. Chances are good that you’ve got a limited amount of income, but an almost unlimited amount of potential expenses. These seven rules should help you avoid any major financial catastrophes while you figure out how to navigate life on your own.

1. Budget before you move out

Before you’ve moved into your new apartment or house, make a budget reflecting your current income and your anticipated expenses. Some expenses you’ll already know (phone bill, car payments, insurance), and some you’ll have to estimate (electric, heating, etc.). 

Use this initial budget to help plan your spending after you’ve moved in. After you’ve lived in the new place for a little while, take a look at your actual bills and recalculate your budget accordingly. Just keep in mind that your utility costs are somewhat seasonal (i.e. if you’re running the AC all summer, your electric bill will be higher).

2. You don’t need every gadget and appliance

A mistake a lot of young people make when they first move out on their own is to attempt to reconstruct every part of how they used to live. For example, your parents probably have about 60 pieces of assorted cookware, from zesters to electric grills to multiple skillets of varying sizes.

Avoid the urge to immediately reconstruct your previous living conditions by buying everything you think you need. Your parents accumulated those stacks of pots and pans over the years. The same is true for all the other gadgets and appliances you’ve gotten so used to. They’re nice, but they’re not essential.

Pare down your lifestyle and make sure you’ve got the basics – these are the things you need to keep yourself healthy, sheltered, and happy.

3. Weigh quality vs. cost when making major purchases

You don’t need everything when you’re first starting out, but you do need some things. Here’s where you need to be strategic about cost.

You could save money and fill your new home with secondhand everything. That may be good in the short-term, but could potentially lead to problems down the line, specifically if your cheap starter purchases need to be replaced not that far into the future.

Think of your purchases as investments. How will they pay out down the road? An overly cheap bed might fit your budget now, but if you’re buying a new bed six months later because you haven’t had a good night’s sleep even once, then the cheap bed seems like a bad investment. Spending $0.50 on a ladle from Goodwill, however, is probably going to work out just fine for you.

4. Create a borrowing network

You can’t go out and buy every piece of equipment you might ever need. Instead, a better idea is to know who has the things you might occasionally need and borrow it from them.

In a best case scenario, this could be part of a larger borrowing network, where you would also share unique items with friends and neighbors. This way everyone saves some money.

When borrowing something from a friend or neighbor, be sure to explain how you’ll be using the item and how long you plan to have it. Then follow through and return the item when you said you would, in the same shape as when you borrowed it.

5. Invest in maintenance, save on repairs

The more you can do to keep your stuff (and yourself) in good working order, the less you’ll have to spend getting things fixed when they break down.

Maintenance doesn’t have to be anything complex. Put screens over your drains to prevent potential blockages. Keep things clean, tidy, and organized to help prevent unseen water buildup or mold damage from occurring. Use your appliances only as directed.

6. Create a system for paying bills and stick with it

Living on your own usually means you’ll have a whole new set of bills to manage on top of whatever bills you already had. If you don’t have a system in place, it’s easy to lose sight of your bills from time to time and fail to make a required payment.

It’s an easy mistake to make, and unfortunately it’s a costly one, too. Just one missed payment can set your credit score back significantly.

Find a bill-paying method that works for your habits and personality. Set reminders, automate your payments, or just pledge to make a payment as soon as you receive any bill. Just pick the style that works for you and stick with it.

7. Learn how to prepare and preserve food in bulk

One of the hardest budget items to keep under control when you’re living alone is your food budget. Buying the correct amount of groceries for meals that only serve one is challenging and it’s easy to get fed up with the whole process and just go straight to the take out.

A better, more financially sound option, is not to cook for one, but to cook large quantities of food and freeze the leftovers in individually wrapped portions. Generally the price per portion goes down the more you make, so you save money by making six meals versus making just one. Plus, Future You saves a lot of time in food prep.

And if your new budget just won't balance, you may need expert support. So remember that budget counseling from MMI is free and available 24/7!

Tagged in Advice for students, Budget tips

Jesse Campbell is the Content Manager at MMI, focused on creating and delivering valuable educational materials that help families through everyday and extraordinary financial challenges.

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