How much money should you save before moving out? A common question that most of us have contemplated when deciding to leave the nest. The answer would be ‘save at least 3 months of expenses”. However, the cost vary as there are several additional costs that you would be including in the total. Moving cost for that matter is one of the most significant cost that you must prepare for. The cost associated with the moving process can overwhelm you, especially if it is the first time you are moving out. Besides searching for the most affordable movers at movingfeedback.com, you will also need to know the right amount of savings you will need once you move out.
We understand the plight and hence have come up with this post to help you make the right financial arrangements. So, let’s get started.
What is the ‘right amount’ to save?
Moving out of the nest is a big decision and the most overwhelming one, you need prepare strategically for the big step if you want to prevent the financial burden that comes with wrong planning and no savings. It is common knowledge that you would need money to finance the move but what amount would be sufficient is the question. Before you know what amount of savings would be enough to have a financially safe moving experience, let us first understand what does the amount actually represents.
Experts state that it is important to save at least 3-4 months of expenses before you move out. However, depending on your personal goals and expenses, the amount would vary. It is important that you consider the rent and daily expenses, also, any additional money that you prefer to spend must be included in this amount.
Here a generic breakdown of some of the common expenses and also easy ways to calculate these expenses.
Saving the rent
One of the biggest expense that you would have to handle is the rent money. It the US, landlords usually ask for a security deposit, as per the financial experts, it is recommended to not rent a house that eats more than 1/3 of your income as monthly rent. However, this is not a practical approach as in big cities like Los Angeles and New York, the rents of even the smallest apartments is sky high.
Lately, the landlords have changed the requirements and now you may have to deposit an amount equal to half month’s rent or 11.5 month’s rent as security amount. Depending upon how much space you need, the amount can vary from one person to another. Whatever be the amount, it is important that you keep this money separately.
Save the moving expenses
One of the significant expense associated with the moving process is moving costs. The cost of moving services have increased in the recent years and what you pay for a simple house move in 2020 may not be the same in 2021. An average account of moving costs in NYC is as follows:
- Average Studio Moving Cost – $400 – $750
- Average 1 Bedroom Moving Cost – $750 – $1000
- Average 2 Bedroom Moving Cost – $1000 – $1500
- Average 3 Bedroom Moving Cost – $1500 AND UP
The cost can vary depending upon the number of rooms you are moving, distance traveled and any additional services availed. An additional room would cost you around $400 extra. If there are some extra labor services requires, like moving the stuff to the higher floors or lack of service elevators, you may have to pay extra.
How to calculate the right amount to save before moving?
Now, let us do a quick recap of the costs we discussed above, depending upon the choice of city you are moving to ( larger cities have higher cost of living as compared to small cities), you must calculate the amount. Let us assume you will have to pay $1000 as the rent. Three months expense on rent would be $3000 then. Now, for the moving costs, you will need to calculate all the services you need, distance you would travel and insurance as well. Let us take a rough figure $500 for it. The sum total of the two heads make $3500. This is the amount that will ensure that you can move into an apartment safely and affordably.
Now, if you are considering saving for three months, you will have to save the living expenses as well. If you spend $400 a month, you will have to save $1200. Adding all heads makes the total amount to be saved as $4700 rounded to $5000 for a month.
You can do the calculation as per your expenses and living preferences and come to a final amount that would secure you financially for next 3 months. Moving affordably is a possibility if you know how to plan the move and the expenses of the coming months, use this guide as the base and calculate the right amount you should save before moving out.
