How to Manage Money When Moving Out
Whether you're young, moving off to college, or someone who has recently been divorced or widowed, managing money by yourself can be overwhelming. Everything you thought you knew about money, living comfortably while someone else paid the bills, gets turned upside down. To successfully manage your money, you will need to gather your resources and learn some new ways of thinking.
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Instructions
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Brainstorm. Write out all possible expenses, including rent, security deposits, utilities, food, clothing, insurance and taxes, that you will have when you move out. Your income will determine where you can afford to live, and to what extent you can afford any extras like entertainment and consumer goods. Once you have an idea of your monthly expenses, you can then begin to adjust your spending habits and look for ways to cut back.
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Gather money-managing tools. You'll need a checking account or savings account, in which to safely store your income. If you can't or don't want to get a bank account, you'll have to find a place to cash your checks and purchase money orders to pay your bills. Use free financial software, such as Quicken or MS Money, on your PC to manage your checking account and to create and track your budget. If you don't have access to software, purchase a budget planner or use a notebook to track your expenses.
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Complete change-of-address forms with the United States Postal Service (USPS) so that you'll continue to receive statements, bills and other correspondence. If you're moving to a new city, you'll also want to inform your employer of your new bank account information if you receive your money by direct deposit. It can take several weeks for records to be updated, so keep your old bank account open until you start receiving your income in your new account.
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Save up the funds for security and utility deposits and at least 2 months of rent, before moving, if possible. If you don't have time to save up, you may have to borrow money from friends or relatives or sell some things to come up with the cash to make your move.
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Make some significant cutbacks in your spending habits for 2 or 3 months, until you are certain that you can afford the extras. Stop dining out or going to the movies. Clip coupons and look for sales when food shopping. Shop garage sales or a thrift store if you need clothing. Use the library instead of buying books.
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Figure out how much money you need each month for all your obligations. Divide that number by 2 or 4, depending on whether you get paid weekly or bi-weekly. This is how much you will need to put back out of each paycheck to cover your expenses. Take this amount and place it in a savings account, and then transfer it back to checking, as needed, to pay bills. Another option would be to withdraw any excess left over after subtracting bill money, and use that for extras, leaving the checking account untouched except when paying bills.
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Tips & Warnings
Call utility companies before moving to find out if they require deposits to open new accounts. Look for banks that offer no minimum deposit and free checking. Update your check register each time you write a check and balance your checkbook monthly.
If you pay bills with cash, it is imperative to get a receipt. If not, someone can come back later and claim that you never paid that bill. Avoid credit cards. The temptation to live beyond your means and using credit cards to finance frivolous spending can quickly get you in financial trouble.
