Financial Advice

Conquer Life’s Challenges

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Preparing for Life on Your Own

Living independently is usually part of another life change: growing up, separating from a partner, or moving on after a major life event. On top of the emotional stress or excitement you may be feeling, there can be financial considerations as well. If you have not lived on your own in a long time—or maybe ever—here are some things to keep in mind.

Getting There
There are many up-front costs to getting your own place:

  • Moving expenses. If your friends or your own vehicle can’t accommodate your move, you may need to hire some help and rent a moving van.
  • Payment for the first and last month. Landlords usually ask for two months’ worth of payment for protection in case you move out suddenly. This amount might be lower if you are taking over an approved sublet.
  • Security deposit. Most landlords require a security deposit, which is held as protection against damages to the premises. You get it back at the end of your lease if you leave the apartment clean and in good repair.
  • Pet fee. Most landlords charge a hefty fee to cover pet-specific cleaning and repair costs after you move out, and the fee is often not refundable.
  • Utilities deposit. You usually need to open an account with the local water, gas, and electric utilities before moving in. Internet access often requires you to establish an account with a cable provider, for example, if mobile-phone access is not sufficient for your internet needs.
  • Furniture and household items. Most longer-term places don’t come furnished. Depending on the unit, you may have to buy basics like a bed and bedding, a sofa, kitchenware, and bathroom linens.

Handling Bills
After you are settled into your new place, monthly bills continue. Always pay them on time! If you don’t pay your bills completely every month, the consequences can include late-payment fees, collection agency calls, bad credit history, utility shutoffs, or even eviction. These serious results can cast a shadow over your financial life for a long time.

If you use your credit union accounts to automate your payments, you can keep your bills manageable. Here are some tips:

  • Housing: Some landlords have an online portal for payment of the place plus any bundled utilities like water. If their portal allows it, schedule an automated withdrawal for the full amount no later than the first date that it’s due. See if you can draw funds from your checking account or a rewards credit card. If there is no automated portal option, schedule a monthly recurring payment that will arrive on or before the due date.
  • Utilities: Utilities include cable, internet, gas, electric, water and sewer, and garbage. Again, if the utility has an online payment portal, get an account, and try to set up automatic withdrawals for these so that you don’t forget to pay them on time. Bill payment can also help with this.
  • Mobile: Know your mobile calling plan. If you get charged for minutes, try to use WIFI rather than cellular time for calls. If you have free texting, let your friends know you prefer texts to calls.
Use your financial institution’s automation features to pay monthly expenses and save while living independently.

Build Savings into Your Budget
As you can see, it may require a large investment just to get transferred into your new place. After your finances have recovered—which may take a month or two—make savings part of your monthly bill-payment ritual. Just as you wouldn’t let the landlord wait past the payment date, be persistent about paying into your own savings—even if you start by putting all your leftover change in a piggy bank.

Over time, find ways to increase the amount you put into savings, if you can. One easy way to do this is by transferring funds between savings and checking accounts at your credit union.

Accounts to the Rescue
Use online banking or mobile banking to keep an eye on your checking account or credit card. This way, you can monitor your obligations to see if a payment did not go out, was duplicated, or was made for an unexpected amount. If you see an unexpected or missing payment, call the utility, landlord, or financial institution immediately.

Think ahead to events that might get in the way of making your payments on time. For example, what if you got ill or injured, or had your work hours cut? What if your car needed unexpected repairs? Set up a recurring transfer from your checking account to your savings account of an amount that you can afford. Over time, as you pay your monthly bills from your checking account, your emergency fund can grow in your savings account.

The good habits you develop around prompt payments and regular saving will pay off down the road when you decide to buy your own place, if that is your dream. UFCU is a big supporter of home ownership for all, and we’ll be here when that time comes.