How Much Does It Cost To Live On Your Own?
In a little less than two years, my oldest son will be moving out on his own. He’s excited, of course, as any teenager would be, but I worry. Living on your own is certainly doable, but it’s not very cheap. Not to mention most young people have no idea of what they are facing until they move out.
How Much Money Do You Need To Live On Your Own
Parents often try to keep their kids from carrying the burden of the family finances, so the kids rarely get a full view of what it’s truly like to live on their own until they are right in the mix of it. While I truly understand wanting to allow kids to be kids and worry about nothing more than getting into college, it can be a disservice to not be open about finances. How else are they going to get a full scope of being an adult unless they see us do it?
For my own children as well as everyone else out there getting ready to take on the world alone, this is for you. We are going to take a good look at different factors that can impact the answer to the question of how much does it cost to live on your own so you have a better chance of success.
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Expense Number #1 : Rent
Let’s start with the absolute basic necessities - your regular monthly expenses. These are the absolute most important things to calculate when asking how much does it cost to live on your own. One of the first things you need to think about is rent.
First of all, you will need a place to live, of course. Under almost every circumstance, this category is the most expensive. Occasionally, people end up with car payments higher than their rent or in crazy amounts of credit card debt that can add up to much more.
Typically, though, you will pay more for rent or a mortgage than anything else. The amount you end up paying out will depend on several factors, including the following:
Where You Live
Where you choose to live is going to play a huge role in your rent amount. Bigger cities have much higher average rent than small country towns. Areas on the outskirts of big cities will cost less than the city itself but will still cost more than cities and towns much farther away.
Let’s put that into perspective. The average rent in Wyoming is $1,213 per month. In California, it’s $3,886. On the eastern side of the United States, Mississippi is $786. Washington, D.C. is $2,363 and NYC is $3,441. As you can see, location matters a great deal. When choosing where you want to go, take this into consideration.
A piece of friendly advice here is to try to be close to at least one person you can count on, meaning it’s best to avoid moving to California if everyone you know is across the country in Ohio. When I was a teenager, I absolutely dreamed of moving to New York. I had plans and ambitions, and New York City seemed like the perfect place to make that happen. I had it all planned out in my head- it was going to be great.
Then, one night I was watching a movie that scared the living daylights out of me. It was not all the muggings and other scary things that they normally show in movies that did it- it was an eviction.
This female character had lost her job and could not find another one in time to pay her rent. In very quick fashion, she received an eviction notice and had nowhere to go. She ended up living on the streets.
I know it was a movie and that is pretty extreme, but it is also completely possible. That movie made me think about the fact that I did not know a soul in or around New York. If something did go wrong, what would I do?
I decided that I would not move that far away from people I knew until I had a pretty hefty savings account built up so, if something did go wrong, I would have something to live on until I found a solution.
I am not encouraging you to give up your dreams at all. I am simply saying that it is important to be prepared when you follow them. If moving across the country is what you really want, do it after you have a safety net.
Be aware, too, that the neighborhood you move into plays a big role. If you want to move into a nice gated community, you are looking at paying much higher rent than you will for a “lower class” neighborhood.
Type of Dwelling
In addition to the location you choose, you will need to decide on the type of home you want to live in. There are houses, apartments, mobile homes, duplexes, condos, and more to choose from.
In my area, apartments are typically more expensive and more strict about paying rent on time. Apartment managers are usually bound by certain rules and regulations, so they do not have much leeway to give you.
Most of the houses we have rented were owned by landlords that were more willing to work with us if we were going to be a little late. As they own the homes themselves, they were able to be more adaptable. Keep in mind, though, that this is not always the case.
And some landlords are still paying the mortgage on the property you rent. If you are late on rent, they are late on the mortgage payment. Mobile homes and duplexes can really go either way.
Money Saving Tip: Share the Space
You can minimize the monthly amount you have to pay out by sharing the space with roommates, but this can come with its own problems. First, you might end up living with people you do not know, and that can be dangerous.
You can, of course, get friends to move in with you, but there is the chance that could cost you your friendship. I can tell you from experience that things can change drastically between people when you live together.
When you hang out, you see one side of your friends. When you live together and are in one another’s space all day every day, you start to see things you never have before. If you choose to be roomies with your buddies, just be prepared for the possibility of losing a friend along the way.
Expense Number #2 : Utilities
Once you have chosen your new home, you will have utilities to worry about. These can fluctuate greatly depending on your usage, the type of utilities you have, and the amount charged per unit.
Electricity
Electricity is one of the most important utilities as it is what powers your lights, appliances, hot water heaters, and just about everything else. The average electric bill is $122 per month. However, there are several factors that impact this amount.
First, it depends on the amount your electric company charges per kilowatt-hour. This usually ranges anywhere from 12 cents to 33 cents.
The next factor is how many kilowatt-hours you use. Typically, a single person living alone will use less than a home with several people, but the number of people is not the only thing to consider here.
The size of your residence and the number of things in your home that use power also play a role. Those that only keep a light on at a time will not have as high of a power bill as someone who keeps on several lights, a TV, a game system, and more- normally.
I say normally because another factor is the energy efficiency of the home and appliances. For instance, a home that is well insulated with all Energy Star certified appliances may have a lower bill than one with outdated appliances, insufficient insulation, and outdated wiring.
For instance, I have a total of six people in my home- me, my husband, and four kids. We once lived in an apartment that was in pretty good shape and our highest electric bill was never more than $200.
Now, we live in a home that lacks good insulation, needs new wiring, and outdated appliance. We are surprised to see an electric bill under $400. Same amount of people, basically the same amount of power being used but double the cost.
It is difficult to know how much your power bill will be until you live there. However, you can call your electric company and ask them to share how much the average power bill has been in the past. With that information, you can at least get an idea of what to expect.
Water/Sewer
You can also expect to pay for water and sewer. Sometimes, this is included in your rent, and other times, your water bill will include trash. This, of course, depends on location. The average water bill can be as low as $18 in some states, but it is often closer to $70.
In the summertime, if you have a pool, wash your car a lot, or let your kids play with water toys, you can expect a little higher of a bill. Usually, though, as long as you have no water leaks or are using an excessive amount of water, your bill will probably not exceed $100.
Gas
Not every home uses gas but many do for heating and cooking. The amount you pay for gas will also fluctuate according to your state and location, but you can call the gas company just like you can the power company to get an idea of what to expect.
Money Saving Tip: Set Up Online Bill Payment
It can be so easy to forget about or overlook a monthly bill, especially when you are new to paying them. Unfortunately, doing so can lead to disconnections, late fees, and reconnection fees. However, by setting up online bill payment, you automate the process, minimizing the chance of the bill not getting paid on time. And of course, save money you would waste by not paying the bill or paying it late.
Expense Number #3: Food
Your food budget will be mostly dependent upon your habits, and can have a huge impact on the answer to how much does it cost to live on your own. Many young people move out without knowing how to cook, make a menu, or grocery shop on a budget, so they live off a lot of takeout.
While eating out from time to time is not so bad, it can add up quickly to several hundreds of dollars each month. By learning how to cook a handful of meals and cutting your eating out down to just a few times a month or even once a week, you can keep your food budget down to a little over $100 a month.
Expense Number #4: Transportation
You have to be able to get back and forth to your destination, but how you do that will depend on you. Some people can bike to work most of the time. Some carpool. Others take the subway or city bus, and others own or are buying a car.
The cheapest way here is biking, of course, but that’s not plausible for everyone. Owning a car is helpful as you only need to pay for gas, but you may not yet own a car. Public transportation costs will, of course, depend on the type of transportation you choose and how often you use it.
Most experts suggest budgeting at least 15 percent of your take-home pay for transportation costs alone. Even if you do not use that full amount, it won’t hurt to put it up for future costs.
Expense Number #5: Insurance
Now that you’re on your own, make sure you have insurance. In this way, if something happens, you have the means to take care of it. If you do own or are buying a car, you have the added expense of auto insurance. For many people, especially those under 25, you are looking at paying out around $100 each month for your insurance.
It may be cheaper for you to stay on your parents’ policy, though. Compare the two prices and see if your parents will just let you pay them for your portion of their insurance premiums.
In addition to auto insurance, you will need to consider health insurance and renters insurance. If your parents have a health plan, you might be able to stay on their policy until you reach a certain age.
Renters insurance is not required by law, but your landlord may require you to get it. Even if it’s not required, you should seriously consider it.
If something happens, such as a fire breaking out in your home, your landlord's insurance will pay for the dwelling but usually does not pay for your personal belongings. However, for about $20 a month, you can be sure that you are protected from covered losses.
Money Saving Tip: Stick to Your Parents' Insurance as Long as You Can
It may be cheaper for you to stay on your parents’ car insurance policy, though. Compare the two prices and see if your parents will just let you pay them for your portion of their insurance premiums. Same goes for health plan, if your parents have it, you might be able to stay on their policy until you reach a certain age.
Expense Number #6: Internet, Phones And All That
Cell phones are no longer an extra - they are a necessity. You need one for job purposes, to call someone if your car breaks down, to keep in touch with parents, to access bank and email accounts, and a ton of other things. Same goes for the internet access. You just need to have that.
There are many people out there that willingly pay more than $100 a month for a cell phone plan with tons of bells and whistles, but it is not necessary.
Expense Number #7: Saving And Investing
Ok, so these two may not be “necessities” per se, but they kind of are. The earlier you can save and invest - even just $5 a week - the better off your financial future will be. Not to mention you will have a stash of cash in case for those rainy days.
Since you are old enough to be on your own, you are probably old enough to start thinking about saving seriously. And if that’s the case, then the first step is finding a savings account.
Expense Number #8: Extras
You will also end up with other monthly bills. Extras can add up quickly to hundreds and even thousands of dollars each month, but you have a little more power with them. These include:
Cable
Subscriptions (Netflix, magazines)
Gyms
Entertainment
These are not necessary, so you can cut them out if your bills add up to too much.
One Time Expenses
When you first move, there will be additional, one time expenses, including:
Moving costs - Trucks, boxes, and so on
Deposits - rent deposits, utility deposits
Furniture - you need somewhere to sit and sleep
Appliances (unless your place comes furnished)
Conclusion
As you can likely tell by now, you can get away with living off of $1,000 a month with the right planning and care. However, it can also quickly tip over to thousands each month. Still, it can be done.
Sit down and work out a budget that you can afford. If you need to cut down, there are many ways to do so. Ask family and friends if they can donate furniture, sheets and blankets, or other things you need for your place, or visit yard sales and thrift stores. Use the library for entertainment purposes.
If you are ready to move out on your own, it is definitely possible. You just need to commit to working hard to get it done. If you want to live on your own, we highly recommend starting to follow and read the Billry blog. You can learn a lot just by reading tips and tricks are experienced writers have picked up over the years. If you want to save on something, Billry can teach you how. Start with our most popular blogs and let us know if we can help.
