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Finance & Money
October 10, 2022 By Budget Insurance
Moving out of home for the first time is an important rite[1] [2] of passage. If you’re moving out without financial assistance from your family, then this is an even bigger step. Before you head out, though, you need to make sure your finances can support your new lifestyle.
Don’t fumble your financial planning. Use our handy checklist to make sure you’re financially stable when you step out on your own.
Make sure you can cover your monthly expenses
Create a detailed monthly budget to make sure you can cover all your expenses once you move out. Subtract all your expenses from your monthly income. If the balance is in the negative, then you need to either earn more or spend less to live within your means. If it’s positive, then you’re on track to being financially stable.
Your need to deduct your:
Tip: Before moving out, try living on the budget you created for a few months. This will not only test your budget, but also prepare you for a smooth transition.
Check your credit score
Landlords and agents use credit scores to vet potential tenants. By looking at your credit history, landlords can determine how much of a financial risk you might pose as a tenant. So good credit is a necessity.
Check your credit profile to find out what your financial history looks like. South Africans are entitled to one free copy of their credit record every year. This gives you the chance to improve a bad credit score before you start searching for apartments.
Start an emergency fund
Avoid the shock of unexpected expenses by creating an emergency fund. With a stable income and commitment to a monthly budget, you can build a good size fund in a relatively short time. Try to save at least three times your monthly expenses before you consider living on your own.
Find accommodation within your budget
The biggest consideration when moving out is finding your new home. The general rule is that your rent shouldn’t be more than 30% of your net salary (your salary after tax and other deductions). If you don’t have the funds to pay for that apartment you’ve had your eye on, then consider ways to save on rent or postpone your move until you’re earning more.
You also need to budget for:
The information contained in this article is for information purposes only and does not
constitute professional advice.