Here are some tips that will help you when you decide to get out on your own.
1. Have enough money to pay first and last months rent, deposit on phone, gas, Electric bill, Internet etc.. It would be good to have about 1500 to 2000 in cash saved up before you even consider moving out. If you have furniture plan on about $200 to rent a truck and many times they require a deposit or a credit card and many times they will not rent to you if you are not at least 21. Two thousand seems like allot but when you hand 6 or 7 hundred to a landlord for the first months rent and you hand him another 6 or 7 hundred for the last months rent and deposit then you only end up with 600 left. If you need to buy a fridge or washer and dryer you could buy used units and save money or save up and buy new ones and then you would need to plan on having more in savings before you move out. You can also go to the laundry matt to wash your cloths like we used to do and take lots of quarters.
1A. If you are not on your parents car insurance plan on paying about 250 to 300 per month for that and add that to your budget and then prefigure how much you will need to make per hour to meet that budget.
2. I will live with friends and save money. This can work sometimes and sometimes it does not work. If you trust the people to pay their share of the rent and utilities each month this can work. Get signed contracts if your the one responsible to pay the landlord and even with these contracts it does not guarantee they will pay you. If you rent a room for say 200 a month know that you will have to share the bathroom most likely and many times things will come up missing (This happened to my son) Other times house parties will keep you up at night when you have to get up early to work (This also happened to my son)
3. Plan on making at least $16 per hour before you plan on moving into an apartment and know that taxes will be 20 to 30% of your check so if you make 16 per hour you will only get about 11 dollars per hour in your paycheck. There are 160 hours work hours a month and 40 a week so that is 1,760 and you have to pay for all your expenses out of that money.
4. When you have a baby you will need to plan on making about $5 to 6 dollars an hour more than you were making before just to cover, insurance, diapers, food and doctor visits. The National figure is higher than 500. If you plan on having the baby in a daycare or child care figure on the need to pay an extra 620 dollars per month to the daycare and this means you will need to make an extra 6 per hour or it means that 6 per hour of your or your spouses income will go to pay daycare. Having mom stay home is a good way to save on daycare but in today’s world is less common than before.
5. On the sample budget I only put 600 per month for rent which is low and most likely not in a great area so you may want to adjust this after finding an area and a good apartment. If you have a friend to share the rent with that is great but if sign a lease remember that if one of you can’t pay it messes the whole situation up so it is best to only rent a place that you know you can afford.
6. Water and garbage charges are many times paid by the landlord on apartments but you will want to check into this and make sure. Gas (Heat) is less in apartments and more in homes an obviously more in the winter. Electric depends on your usage and it will vary also so ask the landlord what the average gas and light bills were. (Many of them will know) When you sign up with Questar and Rocky Mountain Power they will also give you the average usage so you can plan your monthly bills and adjust the numbers accordingly. So what I am saying is, check it out and change the budget to match your individual situation and then redo the numbers so you know how much you have to make per hour to have enough to pay your bills.
7. If you know you need 2000 dollars a month with your budget then figure out how much before taxes so you know how much per hour you will need to make to end up with 2000 after they take taxes out. Here is the example: You need 2000 a month so take 18 dollars an hour times 160 hours a month and that is $2,880 and after taxes (30%) it comes to $2,016 (If you take 2880 times .7 or 70% that will give you what is left after taxes) So if you make 18 per hour then you could meet this 2000 dollar monthly budget and if you only make 15 per hour you can’t meet this budget so you either get a different job, more job training, a degree or lower your bills by cutting the cable, internet, lowing your other bills or taking the bus instead of having a car.
8. How much should I plan on to have a car? Ok this answer will vary a bit depending on the car you get. Your insurance will also be higher when your young, higher when your a young male and lower when you get married and have a family. So plan on about $200 to $300 for car insurance unless your on your parents policy and then you can plan on about $120 or so. Full coverage will cover your car if it is damaged and the other cars in the accident. Liability only will only cover the other car and not your repairs. This is hard if you depend on the car to get you to work so you may want to spend a bit more for full coverage. Many car loans require it.
Insurance 120 to 300 depending on your situation
Car Payment 200 depending on the car. If someone will co-sign a loan with you then you might be able to get a loan. Credit Unions normally have lower interest rates than the car lots so be careful and ask your parents advice.
Many times you will need to have repairs done on a used car and if you bought a new car the payment will be closer to $400 per month.
Most of the time you will need tires every one to three years depending on how you treat the car, how you break and if you bought good tires to start out with. You can buy $50 dollar tires and then have them balanced and put on so you spend $300 total for all four tires but know and REMEMBER THIS…….YOU GET WHAT YOU PAY FOR….. so if you buy a more expensive tire they will last longer. Also know that if your alignment is screwed up that your tires will wear out faster and you will end up paying for it later so it will help you in the long run to take care of your car by maintaining it.
Oil changes and new tires plan on about $35 every 3 to 4 months or every 4000 miles or so depending on your car and then plan on about 35- $50 per month to put into your tire/oil change fund. Separte this money so when the need comes up you will have the money.
So adding this up you can spend 200 to 300 on the payment, 35-100 maint, 150 gas, 200 a month insurance so you can easily spend $600 per month on just your CAR and that is not a new one. If it is new plan on about 800 to 1000 a month. So if you need 600 a month for your car plan on spending about 5 dollars out of every hour you work on your car. So if you earn 8 dollars an hour and 2.40 of that is tax you end up with 5.60 a hour and if you have a car you are left with 96 dollars a month after you pay everything associated with your car. (Don’t forget to add the annual tax, license and emissions fees charged by the state you live in) Newer cars have higher fees but older cars have more expenses and repairs so you will end up paying either way.
You will see from the budget that I may seem low on some of the figures and maybe high on others. That is why you should sit down with your parents or another adult and ask them what they pay for things. Depending on your neighborhood, lifestyle, job and attitudes your budget will be different. Some people change their own oil and save the money doing it. Other people would rather spend that time doing something else and pay someone else to change their oil. Example: If you make 18 dollars an hour at work and you can pay someone else $10 a hour to do something for you to save an hour then you could work an extra hour and be ahead. Some people think they are saving when they are really spending.
So if you spend 5 dollars an hour of the money you make on your car and another 5 dollars an hour of the money you make on your baby and another 6 dollars an hour of the money you make on daycare for your baby that adds up to 16 per hour without figuring in any housing, health insurance, cable, internet, phone, buying new things like TVs etc…. It is best to save up for those things and buy them all at once rather than putting them on a credit card.
If you charge 2000 on a credit card an only pay the min $60 per month it will take you over 15 years to pay that credit card off and you will end up paying way over double what you borrowed. Most credit card interest rates are around 22.85 % and if you pay it off every month completely then you build your credit and avoid the interest charges. You need to build a credit history by making regular payments and paying it off every month and that will help you gain credit but if you abuse it then you won’t qualify to buy a home or your interest rate will end up being high and costing you much more. Talk to your parents about these things before you move out.
Learn to cook so you can eat healthy and save money. Ask you mom to help you learn, spend time in the kitchen with her or with your dad and learn all you can from them before you move out. If your 15 now don’t think you will wait till your 18 to learn these things because before you know it you will be too busy to spend time with them and you will be moved out and not have the knowledge you need and you will end up eating boring food all the time or spending too much on take out fast food. (Besides then you will end up gaining a bunch of weight and getting heavy so learn to cook now while your young)
Apply for lots of grants and scholarships. One of our neighbors got 10 of them but she applied for many more and now she has a full ride at the U of U because she applied for these scholarships and grants. If you go to school you will be able to get a good job and make much more money. If you work on a construction site now and you make say 15 an hour and work your way up to 17 or so don’t fool yourself, it wears your body out and if you get laid off you need to have an alternate plan and that should not be “Do you want fries with that”. GO TO COLLEGE.
You see we as parents want you to learn from our mistakes so you don’t make the same ones we did. The kids end up telling us that they want to learn from their own mistakes and that is fine but if you can avoid some of them life will be better.
I firmly believe guys and girls should live on their own for a while before getting married. This will help you learn responsibility and be independent. Going on a Church mission for 2 years will help you learn to live away from your family as well and so will military service or Job Corp. So if you took time to read this and your a teen then I commend you because most teens won’t get through the first few paragraphs. Good luck and have a great life and remember if you fail to plan you plan to fail. Work will win when wishy washy wishing won’t.
When you start college sit with a guidance counselor and go over your plan of how many credits you need for your degrees and list out all the classes you need, the cost per credit hour, what the books will cost and make a plan of action to get there. Sometimes you can decide to take certain classes like Anthropology 1010 and I found that this class will meet the requirements for many different degrees so this is a good one to take if you decide to change your degree you may save yourself some time. There are classes that you can take at SLCC comunity college that will transfer to the University and there are other classes that will not transfer so make your plan assuming you may need to transfer those credits . Getting college credits in high school can save you money later for college. Grants and scholarships are helpful and you can also buy used books some of the time rather than new.
When you finish a class you can also sell your books to recoup part of the cost. Sit down with someone that is currently in college and talk to them about this and the cost etc…. Also know that there are people that spend years to get their degree only to find out that what they got the degree in won’t really help them in the job field or it won’t help them make that much more money so pick a degree that has jobs that are in demand. Example: Business Management MBA or a Masters in Utah is hard to use since there are so many people with them. If you leave Utah and move to another state then this degree is helpful but know that if you are buying a small home here in Utah for 1200 a month that same size home in California will be over 2000 a month. Everything costs more there. It is true wages are higher but so is the cost of living.
Don’t forget to include Christmas in your budget, I did not do so but planning ahead with it will help you stay out of debt. If you can try to stay out of debt except for your home that would be the very best. Many people get caught in the credit card trap and the interest is what really kills you. Rather than charging something on your credit card, save up and buy it outright.
BUDGET – PLAN AHEAD TO STAY AHEAD
Gross Income Before any deductions
Net Income After Taxes
Monthly Taxes Depending on your situation it could be 20 or 35%
Expected Tax refund divided by 12 Don’t plan on this money to live, in fact it is best to try to
come out even or having to pay rather then getting money
Total usable income back.
Monthly Yearly Notes
Rent or house payment 600 Tax deduction on interest may help here & home bus costs
repairs , car & hm – contingency 30 Plan on more to keep a home up.
Yearly home taxes divided by 12 Add if you are buying a home if renting ignore this
Health Insurance – 100 Family plans are about $300 to $700 per month
Natural Gas 50 This cost is lower in an apartment and higher in a home
Electric Bill 50 Also lower in an apartment and higher in a home
Phone Bill 0 Took this out since you have a cell phone
Internet charges or cell phone 35 If you have both then add them or adjust the figure
Water 15 Higher cost in a home especially with more people
Garbage This varies from city to city and apartment may pay it
Taxes for car divided by 12 33 Depending on the year of your car
Oil changes for car divided by 12 35
Car Insurance 117 Depends on your age, accidents and tickets you have could be 300
Gas for car 150
Car Payment or repair fund 200 If you have a car payment make another fund for repairs
Life Insurance 25
Credit Card 1 0 Best to pay these off each month see notes
Credit Card 2 0
RC Willey Best to pay this off each month as well.
Bus pass or movies entertainment dates 30
Hair Cuts 16 This could be nails or a hair cut
Food from store 100 About 100 per person if you cook or much more eating out
Eating out 46 This is just a few times a month
Lunches 100 This is only 5 per day on work days
Clothes & Shoes 50
Medicine 10 If you don’t need it save it for a just in case fund
Charity Donations, Church etc….
School payments on loans, books etc.. If you add other items re-do the budget
This is living single not in a family 1792
If you need 1792 you need this before tax 2560 This is equal to 16 per hour living alone
Now if your only making 10 you need to cut expenses by not having a car etc…..
If you have a credit card balance of 2000 and you make only min monthly payments you can pay it off in 15 years but you
end up paying about 5000 to borrow 2000. It is best to stay out of debt except for a home, possibly school and maybe a car
If you make 10 per hour and FICA is almost 7 percent and other taxes are about 22 then plan on getting 7 out of 10 on your check
This means if payday is every two weeks then instead of getting 800 every two weeks you get only $560 or 1120 per month
As you can see from the above budget making 10 per hour will not allow you to live on your own in an apartment
If you live with a wife or husband then add more food and additional costs on insurance etc…..
If you have a baby then plan on about 500 dollars more per month to pay insurance, diapers, doctor and food
Getting an additional 500 means you have to make amost 5 per hour more which is 800 minus tax is 560
If the husband is going to be the only one working with a baby so the wife can avoid babysitter cost then plan on making
at least 22 dollars an hour to pay for the extra costs of the wife and baby.
California rent, food and gas cost much more than here in Salt Lake and New York costs even more
So you can see that to make 22 dollars an hour most of the time you need to have a college degree or have two people
making 11 per hour so start planning and looking for jobs that can support a family and working at a Pizza shop won’t.
I hope this was worth reading…….