Thinking about moving out of home?

There's lots of things to plan for if you want to live independently - like how to find somewhere to live, pay the rent, find a job to pay the bills, and get through TAFE or university on a student budget! ASIC offers smart advice about managing your money as you learn to live independently.

The right time to move out of home is different for everyone. Some people leave as soon as they're able, others might wait until they've saved enough money to buy their own place.

Here we explain some things you'll consider when you're thinking about moving out.

The costs of moving out of home

Before you move out, create a budget to help you work out your moving costs and your new living expenses. You need to be realistic when you do a budget so you can plan for any unexpected and ongoing expenses.

Smart tip

Try to save 10% of your pay into an emergency savings fund, to cover unexpected bills. You'll be glad you've got those spare dollars if the worst should happen.

Ongoing costs

Renting a house or flat can be expensive. Make sure you have enough money to support yourself because you'll have lots of ongoing costs once you leave home, like rent; contents insurance; utility bills like gas, water and electricity; food; entertainment and transport.

And don't forget if you have a credit card or a personal loan, you'll need to keep up those regular payments on top of your other bills.

One-off costs

Before you leave home, think about the one-off costs of moving, like removalist fees or the costs of hiring a moving truck, rental bond, connection fees for internet, gas and electricity, parking permits, furniture and furnishings.

In most cases if you're renting, you'll be asked to pay 2 weeks rent in advance and a bond (usually 4 weeks rent) as a security deposit. See our page on rental bonds and signing up for a place for more information.

Sharing with flatmates

House sharing is one of the easiest ways to save money when you move out of home. For example, splitting rent and household expenses for a four-bedroom house with three other flatmates could end up cheaper than renting a one-bedroom unit by yourself.

Smart tip

In shared households, make sure everyone's name is on all the bills. If the bill is addressed only to you, even if you share the costs, you are legally responsible.

Set ground rules with your flatmates at the start, even before you move in together. Make sure you all agree on how you're going to:

• pay for bills
• share the cost of rent and utilities
• share responsibility for household chores
• withdraw from the rental lease when someone moves out
• pay for food (for example, are you going to pay a shared cost as a group, or will everyone shop individually?).

Formal living arrangements

Sharing a lease with your flatmates is called a formal living arrangement.

There are different contracts you will need to sign when you live in a formal arrangement. You will need to sign the rental agreement as well as any contracts for services that are connected to the property, like electricity, gas, water and the internet. These contracts are legally binding, so you and your housemates will be legally responsible for paying for these services.

Always make sure you understand a contract before you sign it. Check the small print and know what your obligations are. Can you afford the payments? Can you cancel the contract and what happens if you do? Unfortunately, you cannot cancel some contracts if you change your mind.

If you can't pay your rent or bills it may affect your credit report. A poor credit report can affect your ability to borrow money in the future.

Informal living arrangements

There are times when you rent part of a house from another tenant, but have not signed the lease. This is known as an informal living arrangement. You will still need to pay for your rent and for services like electricity and gas; however, there is no legal contract as you have not signed a lease.

In a situation like this, the tenant you are renting from will have signed a written tenancy agreement with the owner of the house or unit. This makes them the 'head-tenant'.

If you are in this situation, get a written agreement with the head-tenant that covers things like how much rent you will be paying and how shared household costs will be divided and paid. A written agreement can help set agreed rules and can be used to resolve any disputes.

Be careful if you allow a housemate to live with you and they are not on the lease or you do not have a written agreement with them. If things don't work out and they move out or stop paying rent, you could end up out of pocket without any way to get the money back.

Moving out checklist

Here is a checklist of things you need to do before you move out for the first time:

• Utilities - Set up electricity, phone, internet and gas connections.
• Furniture - Find out if the place comes furnished, or budget for new or second-hand furniture.
• Insurance - Get online quotes if you want to insure your home contents. If you have car insurance, this will also need to be updated as the new address may change your insurance premium. You could also consider getting health insurance, because you may no longer be covered by your parents' policy when you move out.
• Budget - Complete a budget for your moving expenses, making sure you have enough money to cover the one-off and ongoing costs.
• Removalists - Book and pay for a removalist, or arrange to get help from family or friends.
• Research the area - For example, where is the closest bus stop or train station, supermarket, ATM, petrol station and doctor? Are they within walking distance?
• Bills and loose ends - Pay off any existing bills before moving, and change or cancel any memberships you have (e.g. local clubs or the gym).
• Sell unwanted items - Get rid of any unwanted items you have to raise extra money for items at the new place.
• Redirect your mail - Make a list of everything that has your address on it or organisations that will need to be notified of your new address in order to send mail to you, like your driver's licence, your bank statements, and your Medicare card.

Moving out of home is an exciting time, but check your finances to make sure you can cover all the costs that come along with your newfound freedom.

Article adapted from: https://www.moneysmart.gov.au/...