How much money should you save before moving out of state?

Housing Expenses

Housing expenses are likely to present your biggest financial challenge when you move to a new home.

1) Rent or mortgage

If you decide to rent a house or an apartment in your new area, you’ll have to provide for:

  • the first month’s rent – you’re highly recommended to save enough money for at least three months’ rents (six, if you don’t have a steady income yet – you never know how long it will take to find a good job and secure your financial stability) before moving out;
  • a security deposit – the required security deposit is usually the same amount as a month’s rent. You should be able to get your money back when you move out (in case you have kept the place in good condition), but this fact is of little help when renting a place;
  • management fees – a charge for a background and credit check (usually about $50), a charge for hiring a broker to help you find an appropriate home (up to a month’s worth of rent), etc.

Good to remember: If you’re moving long distance and want to choose your new property in person, you’ll have to visit your new city before the move and stay there for several days in order to find a place that meets all your requirements and preferences. In this case, you’ll have to provide for the trip to the city, as well as for meals and lodgings while there.

If you decide to buy a new home, you’ll have to pay the mortgage and closing costs.

Either way, make sure your monthly rent or mortgage does not exceed 25%-30% of your disposable income – otherwise, you may experience serious financial difficulties. To determine the maximum amount you can afford to pay in rent/mortgage you can either divide your monthly income by three, or your annual income by forty. Be careful not to go over that number, however bright your future prospects may be.

2) Utilities

The ultimate financial challenge you’re goin
The ultimate financial challenge you’re going to face when moving out? – Housing expenses, of course.

Needless to say, there will be various ongoing payments you’ll need to take care of in addition to the monthly rent or mortgage – such as the utility bills. Utility costs vary depending on the area where you live and the size of your home, of course, but you can expect to pay about $200 a month for gas, water, electricity, cable, internet, waste collection and removal, etc.

It is advisable to call the service providers in your future area before your move and ask them for an estimate of what your monthly bills are likely to be, so that you can get a better idea of your total monthly expenses.

Good to remember: Many utility companies require a deposit (about $100 per company) and/or a connection fee ($5 to $25) to turn on a service.

3) Renter’s/Homeowner’s Insurance

It is strongly recommendable to get a renter’s/homeowner’s insurance when you move into a new home. It will cost you about $150 a year (the price varies by location, type of dwelling, and number of belongings), but this is a small price to pay for ensuring your peace of mind – proper insurance coverage will come very handy in the unfortunate event of a flood, fire, break-in, or another accident or natural disaster.

Other expenses will add up to your total housing expenses, as well – maintenance costs, property taxes, etc. Make sure you have the financial means to cover them all before you embark on your relocation adventure.


Keep in mind that saving money is no picnic, to begin with. To help you get this job done, here are some money-saving tips you can implement.

• Live a more frugal lifestyle. Cancel those streaming services. Try coffee you brew at home. Walk instead of Uber. Shop secondhand from thrift stores. These things will help you save money.

• Get a good credit card that isn’t going to gouge you on interest rates. You might just need it.

• Open a bank account. Having a checking account, and especially a savings account is going to help you save more money and be responsible with your spending. Walking around with cash in your pocket or a digital wallet makes it too tempting to spend, especially for young adults.

• If you’re planning to move out in a few months, you might want to think about adding roommates now to help burden the existing costs, making it easier for you to save and plan.

• Make a spreadsheet of your current expenses and go down it like a politician with a line-item vote and see what you need to keep, what you can cut back on, and what you can eliminate entirely.

• Try a part-time second job. Many people stop going out to clubs and such when they’re saving money, so their nights are free. If you started a decent part-time job, you could add hundreds of extra dollars a week to your savings and quit once your goal is reached.

• Sell what you don’t need and think about downgrading, at least until you get back on your feet and settle in. It might not net you a lot, but every little bit will help.



Healthcare: Prepare for expected medical costs

If you’re wondering how to live on your own but do

If you’re wondering how to live on your own but don’t have health insurance, Cook strongly recommends that you get it. You can get health insurance through your employer, your parents or in the healthcare marketplace.

“Medical expenses are one of the main reasons a person can end up in financial distress and debt,” Cook says. “Even if you’re young and healthy, it’s not a gamble worth taking.”

When you have health insurance, you might still pay out of pocket for certain visits, procedures and medication. Refer to your insurance plan to see what out-of-pocket costs you’ll need to pay and build those into your moving-out budget.

Consider a Roommate

It might be a good option for you to share that rent with a roommate, or several. Find some friends that are looking to move into the same area as you and look for an apartment that can accommodate your group, which can really cut down on costs!

It’s much cheaper to get 1 bigger apartment and share it between two people than 2 smaller ones for each person.

Cost of your first months’ rent expenses: Rent + fees = ⅓ of your budget.

You Can Afford Renters Insurance

When you live alone for the first time, it’s easy to think that you are invincible. However, unforeseen disasters can occur even if you’re a diligent renter. Renter’s insurance can give you peace of mind and help you repair or replace your possessions in the event of unforeseen situations. Renter’s insurance is a special type of insurance policy that protects your property against losses or damage stemming from covered perils, including fires, storms, or theft.

Although renter's insurance may seem like an unnecessary expense, it's usually affordable—around $20 per month—and can save you a lot of money, compared to paying out of pocket for damages after a disaster.

If you can't afford renter's insurance now, you may want to think about waiting to move out until you have saved up enough to pay for renter's insurance premiums. Worth noting: Rental insurance premiums are based on such factors as where you live, how much you choose to insure, and your deductible. 


To give you an idea of a single figure that you need to arrive at before moving out, here’s an example:

Monthly rent: $1,000

Other monthly expenses: $1,000

First month’s rent + security deposit = $2,000

3-month emergency fund = $6,000

Total = $8,000

In this example, you should have at least $8,000 saved before you can move out with a solid financial buffer.

Use the same approach to calculate exactly how much you need for your situation.

Security Deposit

Once you’ve figured out your maximum monthly rent, double that. Most security deposits are the same amount as a full month’s rent, and while you will eventually get the money back (provided you keep your place in tip-top shape) it is un-spendable until you move out. You’ll also have to pay an additional charge for a credit and background check. Depending on the management company, that will cost between $30 and $100.

How much should you save before moving out?

How much you will need to save before moving out depends on the cost of living in your area. You should have enough saved to cover your moving expenses, including upfront rent payments or security deposits. Your monthly income should cover your rent or mortgage payment, utilities, groceries, and other living expenses. One good rule of thumb is to make sure your monthly income is three times your rent or mortgage payment.


Since this is your first move, you probably don’t have too much in the way of furniture and household goods. While that makes for a cheaper moving, it also means some additional shopping. Renting a fully or partly furnished apartment may be a good idea- even if the rent is a bit steeper. Furniture prices vary considerably, depending on quality, design, size and so on, but your basic needs can be met without overspending. You also don’t need to get everything in one trip to the store. Take the time to visit thrift stores and garage sales and pick up non-essential items like end tables, mirrors, and lamps over time. Check out this new apartment checklist to learn what you should be on the lookout for.

Hidden costs

Think that’s it? Far from. There are plenty of other recurring costs to add in.

To pay for your first apartment, you’ll need to have a job, and you’ll have to get there. Live in the city and plan on taking public transportation? A New York MTA Metrocard, for example, is $120 a month and a 30-day pass for L.A.’s Metro is $100.

Going to drive to work? Be sure to factor in gas for your daily commute, and parking if you’ll need to stash your car in a lot or garage at the office.

You’re going to have to eat. Between groceries and dining out, figure somewhere between $100 and $200 a month, depending on how frugal you are. And you’ll need to look dapper when you go out or head to work, so make sure to include a few dollars in quarters each week in laundry if you don’t have an in-unit setup, and supplies and a higher water bill if you do.

You’ll have to protect your stuff, too, or you’ll be back under your parents’ roof in a heartbeat, so renters insurance is a must and will cost about $10 to $12 a month.

No problem, you say, my paycheck will take care of all this. Well, you won’t be taking home as much as you think, because you’ll be shelling out for things like taxes, a 401(K) and healthcare every two weeks before your check is even deposited.

Know Your Expenses

If you’ve decided to move out and live on your own, you should start by determining what your expenses will be.


Rent is generally the largest expense for anyone who loves on their own.

Depending on where you live, rent can run from hundreds to thousands of dollars per month.

There are many rules of thumb surrounding how much you should spend on rent.

A good one to follow is to spend no more than ¼ to ⅓ of your income on rent.

That will leave you enough to handle other monthly expenses.

Many places will require that you provide a deposit when you sign a lease.

The size of this deposit can vary from state-to-state or city-to-city, but it can be quite hefty.

For example, in Boston, Massachusetts, you might have to provide the first month’s rent, last month’s rent, security deposit, and a realtor’s fee.

This can add up to a total of four months’ rent upfront. That’s before any other upfront costs like insurance and furniture.

Even at a minimum, you’d need one month’s rent and security deposit.

You might need to save up for a while to be able to afford that expense.

Renter’s insurance

Renter’s insurance is often recommended.

Many leases will require that you carry rental insurance to live in the apartment.

Some don’t have this stipulation, but renter’s insurance is still worth getting.

It costs just a few hundred dollars per year at most but offers tens of thousands of dollars worth of protection.


When you live on your own you have to make sure that the utilities stay turned on. That means you’ll have to cover the monthly utility bills.

You can expect to pay for heat, water, electricity, internet, and cable TV service.

Some apartments will cover the cost of some of these (most often heat or water), but others will leave you on the hook for all of them.

While you won’t have much choice of your water or electricity provider, you’re freer to choose an Internet or TV provider.

Shop around and make sure you get a good deal to keep the monthly bill low.


Living on your own means that you’ll have to fend for yourself when it comes to finding food to eat.

While no one will stop you from going out to eat or getting takeout for every meal, it can get expensive incredibly quickly.

Learning to cook is a much better option that can help you save a lot of money.

Learning just a few simple meals, like rice and beans, pasta, and curry can help you get to practice with basic cooking techniques.

They also provide filling meals that cost just a few dollars per serving. If you find that you enjoy cooking, you can explore more recipes as inspiration strikes you.

Cooking in bulk and saving leftovers is a good strategy. It makes it easy to reheat lunch or dinner rather than give in to the temptation to order takeout.

Student loans and other financial goals: Pay off debt and save for the future

In addition to an emergency fund, you want to acco

In addition to an emergency fund, you want to account for other savings goals in your moving-out budget, Cook says. Whether you want to pay off your student loans, save for a vacation, plan for retirement or financially prepare for grad school, you need to be diligently putting that money away.

“You really want to make sure you understand your budget and ensure that your rent and other living costs are still allowing you to save,” Cook says.