Moving Apps for a more organized move!

Q: Our daughter has been working full time since graduating from high school 3 years ago and plans to move out in a years’ time to start her life on her own. My husband and I both agree that it’s time that she becomes independent of us but worry that if it doesn’t work out she’ll want to come home again. Our older son went back and forth a couple of times before he was finally able to live on his own permanently. We don’t want this to happen with our daughter. She’s earning a pretty good income for her age and while she doesn’t have any debt, she doesn’t have a lot of money in savings which is disappointing since we are only charging her $200 for room and board. How do we help her prepare for living on her own so that she gets it right the first time and doesn’t end up on our doorstep at some point in the future? ~ Adele

A: Transitioning from working and living at home to working and living on your own is a big shift for most young adults, emotionally and financially. It’s typically the first time they truly need to be self-sufficient and take full responsibility for all of their decisions. The reason why many young adults who move out of their parents’ house for the first time find it necessary to move back home again is that they weren’t properly prepared financially for the change. As parents, we’ve learned that we have to live within our means, pay our bills on time and set funds aside for seasonal / annual expenses and contingencies. These are brand new responsibilities for adult children about to leave the family nest for the first time. What to Plan for When Moving Out on Your Own

While your daughter may not have a lot of savings presently, she shows that she is thinking ahead because she doesn’t plan to move out for a year. This will give her sufficient time to plan for the move, adjust to the costs associated with living on her own as well as learn how to manage her finances effectively.

Here are some suggestions you can share with your daughter to help her transition successfully to living on her own: Develop a Budget – Track Spending, Plan for Higher Living Costs

Creating a realistic budget takes time. Your daughter’s spending patterns and needs will change. She will need to track her spending to see where her money is actually going now before she can build a budget based upon her future costs of living on her own. She’ll need to plan for expenses that she’s likely never had to plan for, including rent, insurance, utilities, groceries and savings. Using a budget template, calculatoror app might help. Setting money aside for annual expenses and emergencies is also important if she wants to avoid ending up in debt. Encourage her to look online forbudgeting tips that might work for her. Health Benefits and Coverage

One thing that is often overlooked is having sufficient health insurance and benefits. Your daughter needs to understand what coverage and limits she has in place through her employer in order to determine if they will meet her needs going forward. Health care expenses can take a big bite out of your pay cheque if you’re not properly insured.

Moving & Housing Expenses, Including Utilities & Insurance
Your daughter should plan to cover the costs associated with moving and establishing her own housing; hooking up utilities in her name, providing a security deposit for the place she is renting and obtaining contents insurance. Being prepared and saving up for these expenses means that your daughter won’t need to rely on credit to manage these costs.

Plan Where to Live & How to Get to-and-from Work
Determine where she intends to live and the amount of rent she can comfortably afford to pay. She’ll also need to consider how she intends to commute to work. Making use of public transportation is a lot easier on your budget than driving to work and paying for parking.

Separate Needs & Wants – Save to Avoid Credit & Debt
Separate needs from wants. Many young adults make the mistake of financing large ticket expenses as soon as they move out on their own for the first time. It’s important that she learns to live within her means and save up for furnishings and other large ticket household items instead of giving in to the temptation and purchasing these items on credit. Saving up to purchase items is also a lot cheaper than buying on credit.

Make Budgeting for Higher Expenses Feel More Real
Ideally your daughter should be managing her income and expenses as if she was living on her own for 3 – 6 months before she actually intends to move. Encourage her to set the difference between her current and future living costs aside in her savings account to make paying higher expenses feel more real. Not only will this increase her savings, but it will help her adjust to the realities of managing her income and expenses carefully.

Increase Financial Skills
Lastly, encourage her to enhance her financial skills. There are a number of great Canadian books that cover all aspects of personal finances as well as many entertaining blogs that cover personal finances.

The Bottom Line on Helping a Young Adult Move Out of Home
Times are challenging for young adults today. By helping your daughter prepare for her future and build her financial skills, you’ll prepare her to become financially independent and ready to make sound financial decisions that will help her achieve financial success.