move out of your parents' house
Move out of your parents’ house the right way:
  1. Make a budget
  2. Save for emergencies
  3. Pay rent on time

Get out! And stay out!

If you have never lived on your own, the prospect can be exciting, and a little scary. You may not realize how much your first experience living on your own can set you up for housing success — or failure — in the future. And you don’t want to return home in a few months with no money, bad credit, and your tail between your legs.

Here’s how to make it work the first time.

Verify your new rate (Mar 16th, 2018)

Move out of your parents’ house: money stuff

Moving into an apartment or rental home often means paying a lot of money upfront: a damage deposit plus first and last month’s rent, plus deposits to utility companies to get your power, gas, water, etc. turned on.

How to buy a home on $50,000 a year income

Miscalculate, and you’ll spend your first month without light, heat, or even internet. You can make this a little easier if you find a place that includes utilities in the rent. But expect to pay about $3,000 upfront to rent a $1,000 a month space.

How much rent can you afford?

How much can you afford for rent? The normal rule of thumb is about one third of your monthly gross (before tax) income. Earn $3,000 a month, and you should be able to spend $1,000 for rent.

But that’s just a rule of thumb. If utilities are included, you may be able to stretch it a bit. And if your other expenses are high — student loans, perhaps, or an expensive car payment — you’ll need to scale back your housing costs to stay financially healthy.

How much house can you comfortably afford?

If you were buying a home, most lenders would not want to see your total payments — housing and other monthly obligations like credit card payments, auto financing and student loans — exceed 43 percent of your gross monthly income. With earnings of $3,000 a month, that means you should be able to comfortably spend up to $1,290 for everything.

If your car payment is $400 and you owe $100 a month on student loans, that leaves you $790 a month for rent.

Finally, mortgage lenders like applicants to have at least a month or two of reserves — savings available to pay the monthly mortgage if you experience an interruption in income or an unexpected expense. You should have at least a month’s rent in emergency funds before moving out.

Should you get (or be) a roommate?

One of the easiest ways to move out is to move in with someone else who is already established. Your upfront costs will be much lower, and someone who knows you personally may overlook less-than-perfect credit.

However, this obviously involves trade-offs. You won’t have total privacy, and you will…