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What to Know about Saving Up to Live on Your Own

saving money

If you have finished school but have moved back home, you are not the only one. Today, more young adults than ever are living at home. But if you are looking to be more independent and move out, there are a few ways to make sure you are financially prepared.

Create a Budget

You will have more cash for your goals if you create a budget to help you save. Avoid spending more than you make because this can lead to debt. Instead, consider budgeting for individual expenses. There are plenty of budgeting apps that will help you get there. Knowing how much you need to set aside each month can help you budget your money, allowing you to determine a definitive timeline. You can save on your monthly expenses in areas like insurance, student loan refinancing, personal loans, and other financial products. You can shop for personalized rates on the online Navient Marketplace, where you can determine at a glance which products would best meet your needs.

Build Up a Solid Credit Score

Whether you choose to rent or buy, one of the most uncommon moving tips is ensuring you have a good credit score to make the move. Your credit will also determine how much it will cost. If you want to reduce costs and have a better selection, it can be helpful to have a good credit score. While paying your debt down can boost your score, you can also boost it in other ways, including getting a credit card for small purchases. Keep an eye on your credit report by getting free reports on a regular basis. Report any inaccuracies or errors so they can be addressed.

Saving to Buy a Home

If you want to buy your own place, you will need more than if you were to rent. That’s because you’ll need a down payment on the house. The amount will depend on your loan, but you might need to pay around three to 20 percent of the total cost of the house. So, if you are buying a $400,000 house, that would be around $12,000 to $80,000. This might seem like a lot of money, but it may not be completely unattainable for you. You can do so by figuring out your timeframe, budgeting the right amount each month, and making sure you are automating your savings.

Saving to Become a Renter

If your priority is to get out of your parents’ home as soon as possible, renting would be a better option. You should purchase renters insurance of course, but you don’t have as many upfront costs, and some rentals cover some or all of the utilities. Even if they don’t, an apartment is going to have lower utility expenses than a larger house. Just double-check if any rentals you are considering require you to put down a deposit. You may need to put down a deposit equal to a couple of months’ rent, and if you have animals, you may need to put a pet deposit down as well. No matter where you go, you will have moving costs.

 


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