At some point, you’ll want to leave your parents’ house and live on your own. However, moving out can be intimidating if you don’t have your finances together. So, is $5,000 enough money to move out?
$5,000 is enough money to move out if you are renting and not buying an apartment. You should also consider the following factors: where you want to live, having a steady income or job, meeting monthly payments, and having other financial obligations.
In the rest of the article, I’ll discuss how long $5,000 lasts, factors to consider before moving out, and several tips for first-time movers.
How Long Will the $5,000 Last? Cost Breakdown
When you live with your parents (or anyone else who gives you money), you enjoy things like free rent and home-cooked meals. However, at some point, you may feel like you should strike out on your own. Even if $5,000 is enough to move out, how long will it last?
$5,000 can last roughly two to three months if your monthly rent is between $800 and $1,000. However, you should also factor in your ongoing costs (such as rent and utility bills) and one-time costs (such as rental bonds and other moving expenses).
Here’s a table with the full cost breakdown for moving out on a $5,000 budget.
|Cost Category||Approximate Amount in US Dollars|
|Monthly rent + renter’s insurance||$800 +$10 = $810 each month|
|Rental bond (a security deposit equal to one month’s rent)||$800 one-time cost|
|Moving costs (professional movers or renting a truck)||$350 one-time cost|
|Utility bills (electricity, gas, heating, internet, and phone)||$150 per month|
|Furniture and household items||$500 one-time cost|
|Food bills (groceries and other shopping)||$200 per month|
|Loan payments (car or student loans)||$300 per month|
|Other miscellaneous (parking, transport, and other hidden costs)||$100 per month|
Note: These costs are general estimates. They can differ depending on where you live, as well as your lifestyle.
$5,000 Cost Calculations and Explanations
If you add up the monthly and one-time costs, you’ll come up with $2,410 (the amount you’ll pay for the first month). So, your monthly payments ($1,560) plus one-time costs ($1,650) will be equal to $3,210, give or take. Again, that’s not set in stone: It’ll vary based on certain factors.
That means, from your initial budget of $5,000, you’ll be left with $1,790 after the first month’s payments.
($5,000 – $3,210 = $1,790)
The remaining $1,790 should be enough to get you through the second month after sorting your monthly payments of $1,560. You’ll be left with $230.
($1,790 -$1,560 = $230)
Therefore, the $5,000 is enough to move out and survive for another one to two months.
Caveat: If you don’t want to move back to your parent’s house or become homeless after two months, you need to budget and save enough money before moving out. You can also look for other ways to make more money to be on the safe side.
Factors To Consider Before Moving Out
Now that I’ve covered how to move out with $5,000, I’ll dive deep into each cost category and other factors to ensure you have all the information you need before moving out.
Here are factors to consider before moving out.
Rent and Other Crucial Expenses
The first thing you need to consider before moving out is rent, as it’s your biggest recurring monthly expense. A general rule of thumb is that your monthly income should be at least three times your monthly rent, so you’ll leave room for other important expenses.
Let’s take your $5,000 moving out money. If your rent is $1,000, you’re still following the general rule since your initial budget is five times your rent.
Remember to consider other monthly and one-time costs to ensure you have enough income to pay your first month’s expenses.
- Rental bonds. Before moving in, most landlords or property managers require a security deposit from new renters. It’s usually the equivalent of one month’s rent.
- Moving expenses. This involves hiring a professional moving company or renting a truck to transport your belongings to your new rental apartment. It’s a one-time cost.
- Renter’s insurance. This helps you cover the costs of damage, theft, fire, or any other amount you may be liable for on the rented premises.
Home Furniture and Decor
If you’re a first-time renter who doesn’t have your own furniture or decor yet, you’ll need to set aside extra money to furnish your new place. You can rent a fully furnished apartment, to be sure, but this means you’ll have to pay a higher monthly rent.
Also, if you’re on a tight budget, you can always buy secondhand furniture. If you want to buy new furniture, you’ll need to save at least $10,000 per year to cover the costs of moving out and buying new furniture.
Utility and Food Expenses
You’ll also have to deal with utility and food bills every month. After all, you have to keep the lights on, the water running, and make sure you’re eating well. Otherwise, you’ll find yourself returning to your parents with your tail between your legs (and a hefty dose of “I told you so).
Some utility and food bills include:
- Water, electricity, and gas bills
- Internet, cable, and phone bills
- Shopping and grocery costs
- Dining and restaurant bills
Aside from factoring in the expenses above, it’s also a good idea to:
- Pay your car or student loans on time.
- Protect your credit score by paying your monthly dues on time.
- Set up an emergency fund for unforeseen expenses.
- Get health insurance to prepare for any medical costs.
- Set aside some money for entertainment and other fun stuff.
» Read more about this in my post: Moving Out With NO Money — From Your Parents
With $5,000, you can start living independently and enjoy the freedom you’ve wanted for a long time. Keep in mind the factors listed above and other costs to avoid returning to your parent or guardian’s house — or worse, being homeless.
Are you a first-time mover? Follow these tips for an easier transition:
- Look for a stable job.
- Don’t be ashamed to ask your loved ones for help.
- Look for a cheap and suitable place to live.
- Practice good spending habits.
- Find a roommate to split the bills.