So in case nobody has ever told you before, renting is effing expensive.
Actually, living out of home is expensive. There are endless bills. And groceries. And random shit always happens when you really don’t need it to. Like, SURPRISE! Your vacuum cleaner just decided to stop being a vacuum cleaner and now you’d be better off inhaling in the vicinity of the floor!
It’s really cute when that happens.
I’ve been living out of home for about 16 months now (since I was 22) and I’ve learned a few teeny tiny things along the way. Thankfully, I still save money every month, and have figured out a system that works for me.
Here’s the advice I’d give anyone preparing to move out:
1. Really think about what rent you can afford
Mitch and I don’t live in the world’s fanciest apartment by any means. We could probably afford somewhere a bit nicer, and a bit roomier, but we chose to stick to a place that won’t suck huge amounts of money month on month. It’s a bit of a shoebox, sure, but it’s fine.
We decided on a monthly figure that would suit us, and refused to check out any apartments outside our budget.
Side note: When looking for a place to rent, always remember that “$800 per week” doesn’t equal $3200 every month; you need to factor in that most months have 30 or 31 days, not 28, so $800 per week will work out to more like $3450 every month.
2. Have three bank accounts
Alrighty, so the smart thing to do is have at least three bank accounts open; you’re going to need a SPEND, SAVE and EMERGENCY account. Here’s how I make mine work.
- Spend: My monthly paycheck goes straight into this. Basically, I try to see how much I can save throughout the month, and when it’s time to get paid again, I move 80% of whatever I have left over in my spend account into my SAVE account and the remaining 20% into my EMERGENCY. Typically, between $1000 and $1200 gets moved into SAVE, and about $200 goes into my EMERGENCY pool.
- Save: At the moment I’m saving for a house/investment property, so this account isn’t touched aside from the monthly deposits I make.
- Emergency: Okay, super important. SUPER. IMPORTANT. I think every 20-something should make this an absolute priority if they haven’t already: open up an emergency account. This is what I use to pay anything unexpected – the new vacuum I bought last week, the repair cost when my car broke down last year, the parking fine I really could have avoided, the tax return that went a bit awry. An emergency account is absolutely crucial so that if anything goes wrong, you’re covered, and it doesn’t dent your savings. Again – make it a monthly deposit and stick to it. Things ALWAYS go wrong. Always. But you’re clever because you have your when shit hits the fan account 😉
3. Shop smart
I only learned this recently, but MAKE A SHOPPING LIST when you buy groceries! The number of things I’ve bought that we already had sitting in our pantry has been ridiculous. Check your pantry, make a list, and buy stuff either on sale or brand-named. Don’t buy shit you don’t need and will end up chucking after it goes mouldy and funky in your fridge.
(On that note: regularly clean out your fridge. Not for money reasons, but… hygiene and sanity reasons.)
4. Think about leftovers
As in, cook the stuff that will give you leftovers. Buying food every day for lunch is an absolute drainer on your bank account, so when buying food for dinner, think about what will be great to pop in tupperware containers.
Pasta, risotto, stir fry, fried rice – all great, easy and cheap options that will mean you’re covering multiple meals in one hit.
5. If you can’t afford it now, don’t buy it
People don’t always like it when I say this, but seriously, you guys: If it hurts you to pay for that $150 dress now, don’t put it on Afterpay. You’re literally accumulating debt for no reason. You’re also not going to like paying for that dress in six weeks’ time, when it’s old news and at the back of your wardrobe.
Afterpay is really, really horrible for our attitude towards money.
If it stings to pay for something in one go, don’t buy it at all. Save up over time, then make the bigger purchases.
Harsh. But fair.
6. Speaking of clothes…
Get Acorns. It’s a free app that is basically a digital money box; it flags every purchase you make with your debit card, rounds the total up to the next dollar, and saves the difference.
So, for example, whenever I buy my morning coffee (small soy latte, thanks), Acorns sees I’m spending $4.00, rounds it up to $5.00, and invests that $1.00 difference without me lifting a finger.
If I was to buy a $10.20 pack of makeup wipes, Acorns will take $0.80, and so on. It slowly and steadily grows a baby savings account.
I also add $20 in every month, on payday, to keep it ticking along. I’ve had Acorns for five months and have $340 saved.
My plan is that every winter, I take the money in my Acorns account and use it to by investment pieces for my wardrobe that’ll last years; a good leather jacket, a trench coat, great jeans, so on.
I’ll be taking my total amount out in May. By then I should have about $400 all up. Then I’ll start all over again for next winter.
Dishing out hundreds of dollars for clothes is really tricky when you live out of home, so saving in the background is awesome, and means I can still ‘treat’ myself with nice things, but it doesn’t hit my savings.
What do you do to save while renting? Let me knoowwwww.
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