Moving away from home? Prepare for unexpected expenses

Moving away from home is an exciting, albeit bittersweet experience. You’ve got a world of freedom and opportunity ahead of you. But the brand-new costs and responsibilities can also feel quite daunting.

Your dreams of the perfect place, the right location, and ultra-stylish decor mean nothing if you don’t have a plan for how you’re going to afford it all. Before you even think about browsing for houses or apartments, you need to create a budget that includes each of the following categories.

Moving costs

There will be costs involved with your move, whether you’re planning on hiring professionals or recruiting the help of friends and family. These will vary depending on the amount of manpower and equipment you need, along with the distance and time required to get to your new location.

The average moving service will cost anywhere from $80 to $120 per hour depending on where you live and the time of year. A small moving truck will begin at around $20 per day, plus mileage of anywhere from $0.50 to $1.00 per kilometer.

If anyone else will be helping you it’s customary to provide food and beverages. And depending on how far and how many trips required, you may want to compensate their fuel expenses as well.

Furniture

If you’re fortunate, your new house or apartment will come with appliances included — saving you the cost of a new fridge, range, or washer and dryer. But fewer places come fully furnished. Unless you can inherit some of the following items from your parents or other friends / family members, you may need to buy:

• Living room couch and chairs
• Coffee and end tables
• Television
• Television stand or wall mount
• Kitchen table and chairs
• Patio furniture
• Barbeque
• Bed and night tables

Furniture is often much more expensive than you’d expect — with quality, comfort, and aesthetics generally correlating with price. It may be necessary to sacrifice looks and durability for the first year or two of living on your own. Else you risk completely breaking your budget and potentially taking on more debt than you can afford.

Fixed expenses

Your fixed expenses generally recur every month and will take up the lion’s share of your budget. Thankfully, most of these costs are relatively consistent and predictable, which makes them easy to plan for. Depending on your living situation, your rental agreement may include some utilities such as electricity or heating. Read through your contract carefully to understand which ones you’ll need to pay.

• Rent
• Electricity
• Heating / gas
• Water
• Internet
• Cable
• Mobile / data
• Subscriptions (e.g. Netflix)
• Renters’ insurance

If you find yourself struggling to make ends meet, you may be able to save money by reducing or eliminating some of your fixed expenses. Cutting cable or eliminating a handful of streaming subscriptions can save more than $100 per month. Lowering the heat by several degrees or taking shorter showers can also help both your pocketbook and the environment.

Transportation costs

Walking is the healthiest, greenest, and most cost-effective way to get around. You can save tons of money by moving to a pedestrian-friendly community close to work. But it isn’t always feasible. There will be varying costs involved whether you own a car, ride a bike, rideshare, or take public transit.

No matter which option you choose, these costs will ebb and flow from season to season. Track your transportation expenses carefully over the first several months after you move out so you can learn to budget accordingly.

Food

You can only eat so much mac and cheese or instant ramen. And restaurants are significantly more expensive than cooking at home — that includes fast food and takeout. Cooking meals comprised of whole fruits, vegetables, grains, and meat (if desired) is the best option for your health and your bank account.

Plan about 10 to 15 percent of your monthly budget for groceries. You can stretch your money further by buying lots fruits and vegetables, which are extremely filling for their price. 

Unexpected expenses

Of all the things you need to plan for, it’s the ones you can’t that often cause the most trouble. Such is the problem with unexpected expenses: They happen more often than you’d like, but you never know what they’ll be, when they’ll occur, or how much they’ll cost. A healthy emergency savings fund is truly the only antidote.

Try to set aside at least 10 percent of your income every month. Put these funds in a separate bank account used only for emergency expenses. Ideally, you’ll build up to at least three to six months of living expenses. This will help you cover any irregular or unplanned costs without taking on added debt, falling behind on bill payments, or cutting back on necessary purchases like groceries.

Consider the following unexpected expenses you’re likely to face at some point in your life — and use these for motivation to keep on saving:

• Major car accidents, repairs, or replacement
• Major home repairs not covered under a rental agreement or warranty
• Need to replace a mobile phone, computer, or tablet
• Job loss (yours or a partner’s)
• Need to return to school / upgrade education
• Major illness that forces you to take time off work
• Caring for an aging family member
• Need to book last minute travel to visit a sick relative or attend a funeral

If you’re not used to saving, it can take a while to get used to having a big pile of money sitting around that you don’t plan to spend. But it’s the best insurance policy you’ll ever invest in.

Life-Changing Debt Solutions

The vast number of costs that come with moving away from home can be shocking — and you’ll probably wonder how your parents managed to afford it all these years. Unfortunately, those who are unprepared to take that leap often end up supplementing their budget with credit cards, lines of credit, and payday loans.

It’s never too early or too late to ask for help with unmanageable debt. If you find yourself struggling, contact MNP for a Free Confidential Consultation today. During this no-obligation initial meeting, a Licensed Insolvency Trustee will review your entire financial situation and identify opportunities for you to achieve a financial fresh start.

You may qualify for Bankruptcy or a Consumer Proposal, which can halt creditor action and help you become debt free in as little as nine months. In less severe cases, we can also provide referrals to credit counselors, budgeting coaches, and consolidation loan providers.

No matter what option works best for you, we will make sure you have all the information you need to make the best, most sustainable decision for your current and future financial goals.