Planning on moving out in the near future...need advice.

jrthebassguy · #1 09-07-2010, 11:06 PM

Let me give you guys a run down of my situation. I graduated college in May, and found a fairly decent job in June (decent considering the economy and how quickly I found it, anyway). I'm by no means breaking the bank but I now make a wage where I should be able to live fairly comfortably on my own. As such, I've begun storing money away and am looking at apartments.

So here's the deal - I just recently turned 24 and have never lived anywhere other than with my parents. I realize this is may seem pretty late for a lot of you, but the deal I made with my parents was that if I didn't move out of the house for college, they'd pay for my entire tuition and books. This means the only debt I have is about ~$600 of credit card debt (not including car note), which I'm aggressively paying both off now that I'm employed.

Because of my inexperience, there's a lot I don't know going into this, and I don't want to be in a situation where I'm broke in 6 months and have to come back home looking like an idiot. So, I have a few questions.

-Picking an apartment - How do I know if I can truly afford the place? Is there a % of income to go by as a rule of thumb? Obviously, I'd rather live in a nicer apartment, but if I have to live off of ramen to afford my rent, then that's probably not the best option.

-How much should I realistically save before moving out?

-Any other general tips or moving out stories that could provide insight.

-My credit is pretty decent for a 24 year old (never missed a payment on anything ever) but I'm sure could still use a boost. Any advice on that front?

Thanks guys!

Subrage · #2 09-08-2010, 12:12 AM

If you can and willing stay a few months or so and try and pay off your car. 2-500 a month makes life a lot easier.

Most apt complex's have specials.

Check what utilities are paid and which do you have to cover.

Get renters insurance (some places require it, some don't), it varies by location. I pay roughly 200 a year currently, but when I lived out in the suburbs it was around 130.

Plan on paying your first and last months rent plus deposit when you sign your lease.

Make sure to have some extra money for when you move in and need this or that (pots/pans, floor mop/vac, microwave, shower curtain, ect...)

Rent, electric, groceries add up fast so make sure to do your math correctly.

See if you can live without cable which is a rather large monthly bill. I haven't had it in years, and really don't miss it.

A trick I do is have my job split my paycheck out to 2 banks, one for bills and one for what ever I need/want.

I'm sure others will chime in on more.

Kawai-chang · #3 09-08-2010, 07:02 AM

A lot of places say that you should look at 30% of your gross for a living space. I disagree. When I was looking for a house my wife and I decided that we wouldn't go over 20% of our NET income. We found a reall nice house that is well within our budget.

Look for an efficiency apartment, that has the utilities included in the rent. At least the heat if you're in the colder climes. I had one of these here in Cleveland, that was toasty warm all winter, and between gas, elecetricity and renst it cost me $430 a month. which was about 25% of my take home pay. also, cleaned up oin about 30 minutes.

Avoid roommates to get a bigger place. too many horror stories out there.

You do not need a 2 bedroom apt. Unless you have scads of stuff, then you need to sell that stuff and get a small place

Kawai-chang · #4 09-08-2010, 07:04 AM

And start your savings now. NOW.

Kawai-chang · #5 09-08-2010, 07:04 AM

and live Simply.

A great quote: (not mine) "Live simply, expect less, give more."

bigfatbass · #6 09-08-2010, 08:46 AM

Here is my check list:

1. don't get a room mate

2. don't get a room mate

3. You will need 3 months rent to move in: 1st month, last month, and a 1 month security deposit

4. renters insurance is cheap, and a must have

5. go for an "all utilities included" space for your first place.

6. since it is your first place living alone, make sure you pick an apt. with easy access to a social scene of some kind. A walking distance corner coffee shop or bodega can go a long way towards making you feel connected to your neighborhood.

7. Don't sign/commit to ANYTHING on the spot unless you are REALLY sure you have all the background on the place/landlord. Since you just graduated, you must have some friends in the same boat in your area. Bleed them for knowledge. If you don't have anyone to tap, make a point of chatting with other tenants in the building without the landlord present.

8. No matter how nice it may seem, or how hard they may push, don't sign anything more than a 1 year lease. Of course this means you may get the boot in 12 months, but at your age/position that is far better than being stuck. Maintain your freedom to move again.

9. When it comes to furnishings, Salvation Army stores are the BEST. You can find just about any piece of cookware or counter top appliance, sofas/beds/tables and more, and all for the cheapy cheap. A nice tapestry cover on a sofa who's only crime was a big stain lasted us for years after college.

10. You may not have much to base that credit rating on yet, but beware, you are EXACTLY who they are looking to rope. If you want to improve your rating without being too risky, get a Sears/Lowes/Home Depot kind of card. Use it sparingly on those little things you'll need to fix up a first apartment, but pay the ENTIRE bill when it comes in. Don't EVER carry a balance on it. EVER. That means never owing them interest of any kind. Period. Even for small amounts this is harder than you'd think.

good luck jr!

need4mospd · #7 09-08-2010, 10:09 AM

Where are you looking in Houston?

The general rule for housing is to not exceed 28% house payment to income ratio and a total of 36% debt to income ratio. Take your gross income, multiply times .36, and subtract your car payment and average credit card payment. That is the highest your rent should be. No exceptions. Even if you plan on paying off your car soon. Keep in mind you may want another car later that would require a similar car payment. You can get a decent apartment in Houston for pretty cheap, so this shouldn't be hard. Live frugal, it'll pay off one day.

People worry way too much about their credit ratings. Pay your bills on time, keep ONE card for emergencies. Your credit rating will take care of itself.

CrispyDelicious · #8 09-08-2010, 10:14 AM

A lot of good advice so far, especially bigfatbass'. I'd also like to add, get ready to pinch your pennies. Living on your own is a LOT more expensive than you think. No matter what, there will always be something that comes up that doesn't fit into your daily budget - gear breaks, need new clothes, etc. So, even when you think you've got a few extra bucks - stop - save it, because pretty soon it won't be 'extra' cash. There's always going to be expenses you never planned for.

LowDown Hal · #9 09-08-2010, 10:22 AM

Make yourself a budget.....

use your net income and start subtracting bills
If your any good at using Excel it works great for this application.

After you get it set up ask people in the area what they average for utilities. The apt. complex should even be able to help.

start filling in values, pretty soon you'll know exactly what you can afford

Monthly NET INCOME $xxxx.xx

Savings - $xxx.xx

Cell Phone - $xxx.xx

Car Payment - $xxx.xx
Car Insurance - $xxx.xx
Gas - $xxx.xx

Credit Cards - $xxx.xx
Food - $xxx.xx
Entertainment - $xxx.xx

rent - $xxx.xx
renters Insurance - $xxx.xx
gas bill - $xxx.xx
electric bill - $xxx.xx
cable TV - $xxx.xx

__________
this needs to be more than ZERO

need4mospd · #10 09-08-2010, 10:34 AM

Also, scour craigslist daily. There's been some nice stuff on there recently. I bought a $4500 marble table for $650, and it came with 6 $200 chairs that looked brand new. I did lose a couple friends moving that thing though. It was just as heavy as my friend's grand piano.

jrthebassguy · #11 09-08-2010, 09:23 PM

Wow guys, this is some great info! Thanks everybody. That's some great info kawai, bigfat, crispy, and mospeed.

A friend and I were talking about possibly moving together, but I think I'm leaning more towards moving out alone.

Quote:

Originally Posted by need4mospd

Where are you looking in Houston?

I'm not 100% sure yet, but I'm currently eyeing the Clear Lake area.

I work in Baytown (birthplace of Gary Busey!), however I have no desire to live in Baytown, because:

1. Half the town is redneck, the other half is ghetto. I have no desire to live in either part.

2. Both of my bands practice in Bellaire, which as you probably know, is pretty far from Baytown.

So, I'd like to live somewhere where the drive to both won't be so bad. I currently live in Deer Park, which is a nice halfway point and a great place to live. However, I want to get out of Deer Park, as I'd like to get out of arms reach from my parents - they're great people, but I'd like to experience life somewhat away from them for a while. I don't think I want to live in the city proper, because the commute to work takes precedence over the drive to the jam spot. An apartment off Westheimer or Washington would be awesome, but I'm afraid the commute to work would kill me. Clear Lake would make my commute to work longer, but it's not too far, and the drive to Houston is about the same as what it is currently.

fdeck · #12 09-08-2010, 09:43 PM

From what I understand, paying your rent and other bills on time will boost your credit score. You don't have to go into debt in order to get good credit. Don't let anybody persuade you that it's a good idea to borrow money for any reason. Going into debt keeps getting more and more toxic with every passing year and modification to the consumer credit laws.

Live without things until you can afford to pay for them after paying a certain amount into your savings. Cast a skeptical eye on anything that nickels and dimes you with monthly fees.

Do not eat out except as a treat. Restaurant food will bankrupt you and kill you. Learn to cook for yourself -- nothing fancy -- and stop eating processed / prepared / chemical food. Bring a lunch to work. I lived for several months in Fort Worth, on oatmeal for breakfast, sandwiches for lunch, and for supper, whatever I could throw into a frying pan and serve on corn tortillas.

Thank your parents for raising you good.

pica · #13 09-08-2010, 10:08 PM

Go to an office supply store and buy a budget book. Write down all your incoming and outgoing money for two months. And I mean everything. Every pizza, every pack of gum, every six pack of beer. After two months look at your budget and see where you have to make adjustments. You'll be shocked how all the small stuff adds up. And pack your own lunch everyday. Eating out adds up quick.

MadMan118 · #14 09-08-2010, 10:26 PM

Find a good roommate you can rely on to help you split costs.
I usually try to make sure 300% of my income goes to of the cost of my housing(about 30% of your budget)
I'd say save enough money to pay 2 months of bills and enough to cover a deposit and utility start-up costs. Like cable or whatnot.
Make sure your apt comes with gated and covered parking
Thrift stores are a great place for good furniture and even better prices
The best thing you can do for your credit is keep your balances low and pay your bills on time
Best of luck moving out there in the big wide world.
Also as a afterthought, take an accounting class at the local Community College, makes managing your finances a lot better.

Stumbo · #15 09-08-2010, 10:40 PM

I'd consider paying your parents a bit of rent and saving money for a couple of years if there's no rush to move out.

See how your job works out. Invest your money. Study everything you can about where you want to live and how you want to live.

I suggest getting a few books on the topic (money management, etc.).

Here are a couple of links to check out.

Good luck.

bigfatbass · #16 09-09-2010, 08:09 AM

To the last 2 posters: did you read the OP, or anything that followed?

He is a college grad, he is already leaning away from getting a room mate (living solo is the way to go) and he is 24!

You guys are still telling him to live with someone, or stay at Mom's house?

I respectfully disagree totally with that advice.

+1 to the budget book idea, and to paying utilities in full/on time being great for your credit score

i_got_a_mohawk · #17 09-09-2010, 08:39 AM

Quote:

Originally Posted by Kawai-chang

A lot of places say that you should look at 30% of your gross for a living space. I disagree. When I was looking for a house my wife and I decided that we wouldn't go over 20% of our NET income. We found a reall nice house that is well within our budget.

Easy enough if you can afford that.

Where I'm at, my rent is just short of 50% of my income. By the time bills add on, it starts adding up.

(trying to find a place to live by yourself in Edinburgh, for under £500 a month where you aren't likely to get stabbed and robbed isnt easy!)

OP, are you looking at renting? If you are planning on staying in the area long term, it may be worth while looking at buying a place if possible. Better paying off your own mortgage than paying off someone elses. Again, if you can.

Edit - Another thing, take a couple friends or your parents along when looking at places. It's useful to have some extra pairs of eyes looking for issues with the place. Also, I don't know how it works in the US. But if renting, try and do it through a reputable letting agency. Avoid renting direct from an individual (I had friends who did this and were shafted out of a deposit).

MakiSupaStar · #18 09-09-2010, 11:30 AM

Good advice so far.

MatticusMania · #19 09-09-2010, 11:40 AM

Quote:

Originally Posted by i_got_a_mohawk

Easy enough if you can afford that.

Where I'm at, my rent is just short of 50% of my income. By the time bills add on, it starts adding up.

Thats why I like living with my fiancee and a roommate. My rent is just under 25% of my income. We live in a nice area, in a 2 bedroom condo with an upstairs loft, where rent goes for about $2000 a month.

need4mospd · #20 09-09-2010, 01:18 PM

Quote:

Originally Posted by i_got_a_mohawk

Edit - Another thing, take a couple friends or your parents along when looking at places. It's useful to have some extra pairs of eyes looking for issues with the place.

I'm pretty sure most buying/renting guides specifically advise against this. After taking my parents with me a few years ago when we were house hunting, I figured out why that's true REALLY quick. They're not looking for YOUR perfect spot, they are looking for what they THINK is your perfect spot, which is more in line with THEIR perfect spot. Sure they might spot a couple things here and there, but it's doubtful they'll catch anything meaningful. If you insist on it, take your initial tour and then take your friends/parents to the ones you like the most.