Out of the nest and making it in the real world
Budgeting tips for young adults
Determining your personal cash flowGETTING STARTED on a budget is as easy as checking out these online resources:
Smartaboutmoney.org offers information and work sheets.
Mint.com lets you create budgets, track expenses, set goals and offers up related services and tips.
Yodlee.com connects users to financial services.
Moneystrands.com aggregates and tracks accounts, offers information, services and tips.
Quicken.Intuit.com offers software packages for every level.
Are you planning to strike out on your own for the very first time? It can be a bit frightening to realize you'll be fully responsible for your living arrangements and the ability to survive. No matter what the reason is for your move or how soon, though, you can take certain basic steps to help you be better prepared.
Start with a list.
In one column, report your monthly income, and be sure to include any possible fluctuations. If your salary is dependent on a commission, for instance, realize that your commission is not a guarantee.
In the next column, list your necessary expenses, including rent; utilities; insurance; food; gas for your car; train tickets or other work-related travel expenses; and any outstanding debt you're paying off (e.g., student loans).
At this point, the hope is that your monthly income exceeds your expenses.
Finally, in column three, list your wants — a weekly movie night, occasional dinners out, trips, etc. Column three is the first place you can cut if you need to save money.
Depending on your reasons for moving and the time you have before you move, it's a good idea to have two to three months' worth of expenses in savings "just in case." (Your monthly expenses should be, at the minimum, the total of column two.) This way, if something unforeseen happens, such as a job loss, you have a reserve to help you maintain your lifestyle until life gets back on track.
If you don't have the time to accumulate this savings before moving, you should make building up this reserve a priority, even if it's by only a few dollars per week. Getting into the habit of putting away money toward your future is wise.
There are also some one-time expenses you'll need to prepare for when relocating, especially if it's your first big move. Furnishings aren't cheap, but the basics are necessary. You need somewhere to sleep, a place to put your clothes, someplace to sit and eat, pots and pans to cook in, and something to sit on to relax or entertain.
Other expenses to prepare for include opening a checking account and paying for new checks; registering your car, especially if it was in your parents' name or from another state; transferring prescriptions; and covering utility or rent deposits.
Remember to allow for the cost of a truck rental or moving company if you do have any furniture that you'll be taking with you.
It's also important to be realistic about your budget. If you don't have the type of income and savings to cover the necessary expenses, you may need to postpone your move or modify your future living arrangements. Think about:
• A furnished room instead of a full apartment if necessary.
• A roommate or shared-living situation.
• No cable TV or Internet access right away. Many libraries offer free Internet, and several municipalities offer Wi-Fi hot spots.
Once you do make your move, remember it takes a lot of self-discipline to fit your new life into your budget. A good idea is to track your spending; many incidentals add up before you realize it, and this is usually a very easy place to cut your expenses.
Register for club cards at your local groceries; these will often offer you shopping savings and online couponing. And of course, clipping coupons will help keep your grocery bills under control.
Learn to cook in bulk and freeze portions. It's a terrific way to have the convenience of pre-prepared food at inexpensive cost when you come home late and don't feel like cooking.
If your income is steady, sign up for automatic payments for routine expenses, and you'll avoid late fees.
And if you use your credit card to make occasional purchases, try not to buy anything that would take you longer than three months to pay off. It will keep your finance charges from skyrocketing.