Article Moving out for the first time? 7 money questions to ask yourself

Moving out for the first time is an exciting milestone, whether you're renting your own place, heading off to university, or saving to buy your first home.

But, before you pack your bags, you might want to think about the costs and responsibilities that come with living by yourself. Here's a handy checklist of seven things to think about before moving out.

1. Can I comfortably afford the monthly rent?

One of the biggest costs of moving out is your rent payment. A common rule of thumb is to spend no more than 30% of your monthly income on housing costs, helping you leave room in your budget for bills, savings and unexpected expenses.¹

Let’s look at an example. Trisha is 21 and works 35 hours a week, making £20,000 a year. After Income Tax and National Insurance, her take-home pay would be around £17,920 a year, or about £1,493 a month. Using the recommended 30% figure, Trisha should be paying no more £448 a month (£5,376 a year) in rent. Depending on where in the country Trisha lives, she might be able to find a houseshare or rental for this price.

Questions to ask yourself:

• How much is my monthly take-home pay?
• Will I live alone or share with others?
• Will I still be able to save money after paying my rent?

2. Have I saved enough for the deposit and upfront costs?

Renting usually involves more than just paying the first month’s rent. You’ll normally need a tenancy deposit and may have other moving expenses. Deposits are refundable and typically capped at five weeks of rent if the total annual rent is less than £50,000, or 6 weeks if the annual rent is above £50,000.²

Remember that since 1 June 2019, there are certain charges landlords can request from you. Read GOV.UK’s tenant fees act for more information.

Costs to consider:

• Tenancy deposit
• First month's rent
• Holding deposit
• Removal or moving costs
• Basic household items

3. What will my monthly bills cost?

Many first-time renters focus on rent and overlook regular household bills. For a flat or one bedroom house with one or two occupants, the annual gas and electric bill is around £1,172 (£97.67 monthly).³ This can vary depending on usage and where you stay, and you might find that you will pay less by paying via direct debit.

These might include:

• Energy bills
• Water charges
• Broadband
• Mobile phone costs
• TV licence 
• Contents insurance

4. Have I budgeted for food and everyday spending?

Once you move out, you'll become responsible for your own grocery shopping and household essentials.

Think about:

• Food shopping
• Cleaning products
• Toiletries
• Takeaways, meals out and social spending

A realistic monthly budget can help you understand whether moving out is affordable right now.

5. Do I have an emergency fund?

Unexpected costs can happen at any time. Your boiler could break, your laptop might need replacing, or your income could temporarily change.

Building an emergency fund before moving out can provide valuable financial security and reduce money worries.

6. Do I want to rent or buy?

The costs of renting and buying can be quite different. If you’re hoping to buy your first home, you’ll need to think about saving for a deposit and understanding what mortgage repayments could look like. Mortgage lenders often consider income alongside a range of other affordability checks when deciding how much they may lend.

If you want to buy your first home, it’s important to remember that the purchase price isn’t the only cost involved. Alongside saving for a deposit, you may need to budget for a range of other expenses like:

• Solicitor or conveyancing fees
• Mortgage arrangement fees
• Property survey costs
• Mortgage valuation fees
• Buildings insurance
• Removal costs
• New furniture
• Stamp duty

Before buying your first home, it can be helpful to create a budget that includes both the upfront costs of purchasing a property and the ongoing costs of home ownership, so there are fewer surprises along the way.

7. Will moving out affect my long-term financial goals?

It’s easy to focus on the excitement of having your own place, but it’s worth considering how housing costs fit alongside your future goals.

Ask yourself:

• Can I keep saving regularly?
• Am I contributing to my pension?
• Will I still be able to build an emergency fund?
• Do I have enough flexibilityh in my budget if costs increase?

Moving out should support your lifestyle today without derailing your plans for tomorrow.

One more thing to consider: what would your future self thank you for?

Moving out for the first time is a big milestone, but it's also an opportunity to think beyond the next few months. While it's important to budget for today's costs, it can be just as valuable to think about the future you're working towards and where you'd like to be in the years ahead.

Whether your future goals include buying a home, travelling, changing career or simply feeling more financially secure, the decisions you make now could help shape what's possible later on.

If you fancy exploring this idea further, you might want to check out ‘How to connect with your future self’ from the Money:Mindshift podcast. In this episode, Dr Tom is joined by behavioural scientist Hal Hershfield to discuss why many of us struggle to plan for the future, and how feeling more connected to our future selves can influence the financial decisions we make today.

The episode is available now on Apple Podcasts and Spotify.