Ready to move out of home? Get started with our quick guide

Moving out for the first time could be exciting, but before you pack your first box there are several things to consider.

For starters, living on your own can be expensive and overwhelming if you don’t prepare in advance. If it's your first time moving out, chances are you’ve never had to pay for many of your own bills and expenses. No more relying on the bank of mum and dad! 

So it’s a good idea to prepare, understand what’s involved and know what costs you’ll be facing. Let’s take a closer look.

While rent may be expensive, it’s a necessary evil of a renter’s life - unless you can afford to buy your own home. 

Australian Bureau of Statistics (ABS) data says the national average weekly rent is $488, with Sydney and Melbourne being some of the most expensive places to rent. That means the average Australian is spending about $2,120 a month on rent.

While there is no hard and fast rule about how much you should be spending on rent, ABS and Moneysmart recommend that it be under 30% of your income. But the ideal sweet spot is 25%**.

**Note: Rent in capital cities tends to be higher than in regional locations. According to ABS and Domain, city dwellers spend about 23% - 36% of their salary on rent. However, when moving out for the first time consider finding a property that costs less than 30% of your income.

Below we show how to calculate your 25% - 30% rent sweet spot.

First, get your weekly net pay and then plug it into the numbers below.

Weekly pay x 0.25 = target weekly rent

Let’s assume you make $1,000 a week. Using the formula above, your target weekly rent would be $250.

$1,000 x 0.25 = $250.

That means if you plan on living by yourself, you should be looking for places costing about $250 a week to avoid rental stress. Alternatively, if you’re living with a roommate, aim for a place where your share of the rent is about $250 a week.

Once you’ve figured out exactly how much rent you should be paying based on your income, it's time to figure out how all your other expenses fit into the formula. The best way to do this is by following a budget like the 50/30/20 model.

The cost of moving out is more than just paying rent. You have to consider the upfront and ongoing costs that come with living on your own.

Here are some costs to budget for

When figuring your monthly budget and what you can afford, remember to include all ongoing costs in the figure. 

Typically, rent is going to be one of your biggest costs when moving out. The last thing you want is all your income going towards rent/living expenses and not having money for other things. When this happens it's typically called ‘rental stress’.

So to avoid this stress, the first step is figuring out how much you can afford.

ANZ recommends managing your money using the 50/30/20 budget model for all costs.

As mentioned, moving comes with more costs than just rent. You should also factor in expenses like utilities (gas, water, electricity) and internet into your budget. 

Below we’ve broken down how much of your monthly salary should go towards what.

While this budget guide is generally great to follow, it can be unrealistic for those with low incomes or living in places with high living costs. 

If they don’t work for you that’s fine. However, a good rule of thumb is that your discretionary spending should not exceed your essential expenses. Also, it’s always a good idea to put some money in a savings account, no matter how small. 

If moving out is still too expensive after creating a hypothetical budget, then consider moving out with a friend or family member. When you share a home your expenses can be halved! Just remember to have a joint account for shared costs.

Of course, before officially moving out, you need sufficient funds in your bank account. The last thing you want is to run out of money before the next paycheck!

This checklist is to help with the money side of things:

1. Open a savings account that is exclusively your moving out fund. This should cover your bond, the first two to three months of rent and bills and spending money to furnish your new place.
   
2. Have an emergency fund to cover any potential unforeseen expenses that your landlord may not cover right away like hiring a locksmith, a plumber or an exterminator. 
   
3. Compare utility providers. Try to find the best or cheapest deals for electricity, gas or internet. Saving a buck or two here and there will help in the long run.
   
4. Sell old items that you won't need when you finally move out.
   
5. Ask for money as your birthday or Christmas present. Put that money in your ‘moving out’ savings account.
   
6. Cut down on costs like takeaway, going out and impulsive purchases. Saving a couple of bucks here and there will get you to your goal quicker.

If you want more savings tips check Mozo’s savings guides. 

The next thing you need is a place to live and a bit of luck. So, good luck on your next big adult adventure!

Or, if you’re ready for the next step of owning your own place, we have handy guides on how to find the best home loan for you, budget for your first property and pay off your mortgage.