They say we are meant to move around; if we were not, then we’d have roots, like trees. Many of us never move out of our parents’ house, unless we get married. And many of us do, for various reasons such as wanting to taste independence, or to pursue a job and/or further education. Irrespective of what your reason of moving out is, doing so will be challenging but also thrilling. You don’t know saving and budgeting until you are completely responsible for your expenses, including your rent, groceries, bills, etc.
It’s incredibly heart-warming to see people moving cities, with a pocket full of dreams and aspirations. While it is a great move (given you are ready for it), a lot of financial planning goes into it so your wellbeing and security aren’t thrown off balance amidst all that.
Meghna Jaisingh, a chartered accountant and financial advisor, explains what kind of expenses you should make a note of, before considering moving out of your parents’ apartment.
1) Cost of accommodation
“Many people only prepare for the monthly rent but they fail to budget for the security deposit and brokerage. The security deposit varies from property to property and is minimum a month’s rent. Brokerage may or may not apply,” Jaisingh points out. While you get the security deposit back when you are leaving the house (full amount if there is no damage to the property), brokerage won’t be reimbursed. You must thus, have a substantial amount of investment and not just the house rent.
2) Furnishing your home
It is easy and convenient to opt for fully- or semi-furnished apartments. This way, you at least get the basics—AC, kitchen equipment and electronics, etc. If you were to buy these for yourself, they would not only break your bank, but also cost a lot when you decide to move places again. “Unless you are establishing roots, it’s safe to go for a furnished or semi-furnished flats. These will cost you slightly more than unfurnished apartments but are more convenient. Alternatively, to cut down costs, you can even go for an unfurnished apartment and simply rent the furniture and electronics that you absolutely need,” Jaisingh advises.
3) Commute expenses
If you’re moving to another city, you have to take into consideration how much you will spend in commuting to your place of work or education. You may find a cheaper accommodation far away, but end up spending more money in just commuting every day. “Make sure public transport is accessible from where you are moving. If not, find out the costs of owning a vehicle. Ask yourself how much you will save in rent if you move further away from your workplace and if the cost of commute is worth it.”
4) Utility bills
“Your entire cost of living—including your rent, bills, groceries, etc.—should not be more than half of your salary,” Jaisingh suggests. “Otherwise, you are living less and struggling more to make ends meet.” Before moving out of your parents’ house, make sure you are making enough money (or have some sort of financial support) to live securely. When you are sharing an apartment with flatmates, you will most likely contribute to house help expenses, and towards the cost of electricity, internet, water, etc.
5) Groceries and other expenses
“If you’re on a budget, shopping from supermarkets and online stores that offer great discounts will help you save more on groceries. Understand your consumption and keep aside an amount every month just for your groceries and personal items,” Jaisingh points out.
6) Lifestyle expenses
While some cities are more expensive in terms of restaurants, cafes and bars, some are cheaper. “You will have to consider what unwinding in your city will cost you. This means the cost of eating out, ordering in once in a while, going to a café or getting a few drinks at a bar,” Jaisingh points out. She also said that it should be noted how often you like to socialise and how far you are from places that offer the opportunity to do so. “When you are coming home from a night out, you will most likely take a cab back home and not the bus. That again, adds to the cost of living considerably,” Jaisingh explains. Apart from these, you may have to consider expenses for any hobby or fitness classes you are interested in joining.
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