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Downsizing can be a daunting task, especially when it comes to transitioning to a smaller living space. The decision to downsize often comes with a myriad of motivations. Some may be seeking to downsize their home to free up time, money, and energy for other pursuits, such as travel or hobbies. Others may be empty nesters looking to rightsize their living space after their children have left home. Still, some individuals may be approaching retirement or transitioning to a different stage of life, where smaller and more manageable living arrangements become appealing.
Whatever your reasons for downsizing, it’s crucial to approach the process with a clear vision of what you hope to achieve. Downsizing offers an opportunity to shed the unnecessary and create a living space that truly supports your lifestyle and values. Whether you’re moving to a smaller house, a condo, an apartment or exploring the options offered by tiny homes or senior living communities, these tips will help you make informed decisions and create a space that feels like home.
By following the tips in this article, you can make the downsizing journey smoother and create a comfortable, fulfilling living environment.
1. Evaluate your needs and priorities:
Before starting the downsizing process, evaluating your needs and priorities is essential. Consider factors such as location, amenities, proximity to healthcare facilities, social opportunities, and your desired lifestyle. Knowing what is most important to you will help you make informed decisions throughout the downsizing process.
2.Declutter and organize:
Downsizing is the perfect opportunity to declutter and streamline your belongings, letting go of some of your accumulated possessions over the years. Take the time to declutter and organize, separating items into categories: keep, donate, sell, or discard. This process can be emotionally challenging, but remember that downsizing allows for a fresh start and a chance to focus on what truly matters.
3. Maximize space:
In smaller living spaces, efficient space utilization is crucial. Look for furniture that serves multiple purposes, such as storage ottomans or beds with built-in drawers. Utilize vertical space with wall shelves or hanging organizers. Make sure to measure the new space to ensure your existing furniture will fit appropriately and leave room for comfortable movement.
4. Consider accessibility:
As we age, it becomes increasingly important to consider accessibility features in our living environment. Look for homes or communities that offer step-free entrances, bathroom grab bars, wide doorways, and other accommodations promoting safety and independence. Prioritizing accessibility can provide peace of mind and enhance your overall quality of living as you age in your new home.
5. Research independent senior living communities:
If you are of age to do so, consider independent senior living communities. Look for communities that align with your needs and interests. Consider factors such as the range of activities and amenities available, the community’s reputation, the quality of healthcare services offered, and the level of social interaction. Visiting the communities in person and talking to current residents can provide valuable insights.
6. Plan your budget:
Downsizing can have financial implications, so planning your budget is crucial. Consider the costs associated with the move itself, potential renovations or repairs, and ongoing expenses in your new home. Having a clear budget in place will ensure a smooth transition and help you make sound financial decisions.
7. Seek support:
Downsizing can be overwhelming, both physically and emotionally. Don’t hesitate to seek support from friends, family, or professional organizers who can assist with the process. Their assistance and guidance can make the downsizing journey much more manageable.
Additionally, if you are moving into an independent senior living community, you can reach out to local senior support organizations that offer resources and guidance specifically tailored to downsizing as an older adult.
Downsizing your home is a significant change, but with proper planning and consideration, it can be an exciting opportunity for a fresh start. By evaluating your needs, decluttering, maximizing space, considering accessibility and future needs, planning your budget, and seeking support, you can navigate the downsizing process successfully. So embrace the possibilities that come with downsizing and create a comfortable and efficient living environment that suits your lifestyle!
Jennifer Bell is a carer for two aging parents, tiny home lover, and writer for senior living communities in Philadelphia.
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If you are looking to buy a house, I have a bunch of home buying tips that will help you sort through all of your options, understand the real cost of a home (and help you save money), and make the right choice.
Buying a house is a huge purchase.
In fact, it is usually the largest purchase a person will ever make.
The median U.S. home value is $226,800 and the median price of homes currently listed is $291,900, according to Zillow. And, there are some areas that have much higher average home prices, like four to five times more.
Purchasing a house is a huge commitment, and it’s easy to get excited and forget to think about some very important things before plunking down a huge amount of money. There are just so many factors to think about, and not everyone will have the same concerns.
To help you through the home buying process, today’s post is going to be like a mini first time home buyer guide. I’m going to cover some of my best home buying tips, like:
Whether or not you should rent instead of buy
How to set a budget (one of the most important steps to buying a house for the first time)
Deciding what you want in a home
How to research the true cost of a house
Thinking about how long you’ll live in an area (recouping your costs)
How to avoid feeling rushed
Do you really need the house you’re about to buy
Whether you are a first time home buyer or if this is your second house or more, these are all things you should be thinking about.
Actually, these are the exact same things me and Wes have thought about before buying our sailboat and RV. They might not be “normal” homes, but they are what we live in. Plus, they are still very large purchases that need to be carefully thought out.
The home buying tips that I’m about to give you are to help you analyze what’s best for your situation – whether that’s a 5000 sq. ft. house, a 500 sq. ft. tiny home, an RV, a condo, etc.
I’ve said it already, but buying a house is a large purchase! And, everyone has felt that dreadful feeling that comes after making a large purchase and realizing that you have made a mistake. Perhaps you don’t realize for months or years later, but you eventually understand that you should have thought out your purchase a little bit more.
No one wants to feel this way after buying a house!
Articles related to buying a house tips:
Here are my best home buying tips.
Should you rent instead?
Before we started RVing, we sold our house and rented one for a little while. This raised quite a few eyebrows and led to questions about renting vs. buying from nearly everyone.
I even had several people tell me that I was making a stupid mistake.
I wasn’t surprised, though. Many people believe the myth that if you are renting a home you don’t know how to manage your money and that buying is always better, no matter what.
That couldn’t be further from the truth.
Sometimes buying can be the better decision, but there are times when renting can fit a person’s situation much better.
Buying a house can have a lot of positives, but that doesn’t mean it’s the right step for everyone.
To determine if renting is better for you, you’ll want to think about things such as:
How long you think you’ll live in the area.
Whether or not you’re ready to purchase a house, financially and/or responsibility wise.
Buying a home sometimes may be cheaper than renting, and the other way around.
Nearly everyone says that a house is a good investment. Many people will even go as far to say that doing anything other than owning a house would be a complete waste of money.
However, I don’t agree with that at all.
Buying a house isn’t for everyone. You shouldn’t just jump at the opportunity to buy a house, especially any ol’ house. And, you should think about all of the factors before deciding that buying a house over renting one is the best and only decision for you.
For home more renting vs. home buying tips, please read My Opinion Of The Great Renting vs Buying Debate for more information.
Set a budget before you look at homes.
“What’s the smartest way to buy a house?”
The smartest way to buy a house is to first think about your budget.
One of the first things you will want to do is to set a budget – you can’t go very far in the home buying process without one. It’s how you will know what you want to be pre-approved for, and a realtor will need that information to really help you shop for homes.
You will want to set yourself a budget when it comes to the home as well as all of the other expenses that go along with owning a home.
You will want to look at your overall financial situation and analyze:
The income you earn.
The stability of your job.
The amount of money you have saved for the down payment, other home expenses, etc.
Your credit history and credit score.
The total monthly amount you feel comfortable paying for a home. Make sure you look at all the costs involved!
Your total amount of debt.
When buying a house, it takes realizing all of these factors to understand what you can truly afford and be comfortable with.
However, many people justify buying a house that is over their budget, but that is a bad plan.
See, banks often pre-approve people for a mortgage payment that is higher than what they can afford to pay. You pre-approval number is not a good gauge of what you can afford because it doesn’t factor in the total cost of the house.
What you can afford takes that above list into consideration, not just the number a bank gives you. Because of that, it can be a very bad idea to go over the number the bank pre-approves you for. You should always stick to an amount that you can afford.
When determining what you can afford, you will want to think about ALL of the costs that come with buying a house and living in it. This means that your research should not end with the purchase price of the house – it actually goes way past that, as discussed in a later section of my home buying tips.
Think about what you want in a home.
If you are like most people, you’ve spent years thinking about what you want in a home.
Now is the time to make a list of those things. This is an important step when it comes to home buying for beginners.
Buying a house can lead to a crazy amount of new feelings – happiness, stress, excitement, and more. This can sometimes make every house you look at seem like the perfect one, and that’s because they all seem so new and exciting. This even happens with houses that don’t have everything you need. And, it definitely happens with ones that have more than you need.
Before you put an offer on a house, you should think about the reasons for why you want a specific house. This is one of the first steps to finding a house that’s right for you, as this can make sure you are getting exactly what you want and need, rather than just being happy with any home.
I recommend creating a wish list that includes all of the things you want in a home. Your wish list could include things like:
The square footage of the home
Size of yard
If you want a fenced in yard
How many bedrooms and bathrooms you desire
The age of the home
The quality of the schools
The parking situation and whether or not there is a garage
The size of the kitchen
Pool or no pool
Style of home
Whether you want to be in the country or the city
Your budget, and this one is extremely important!
And, you’ll also want to create a list of things that you want to stay away from, such as if you don’t want a place with a pool, a home with a lot of yard maintenance, a home that is a fixer upper, and so on.
By having this wish list on hand, you’ll know exactly what you should be looking at, and what you should avoid.
Research all of the expenses.
Like you just read, the listing price of a home is not all that you should look at.
When you find a home that you think is right for you, you need to make sure that you can afford all of the costs that come with that home.
Just because you can pay the monthly mortgage payment doesn’t mean that you can afford everything else that goes with it. There are ongoing costs when buying a house, which is something that many homebuyers forget about.
In fact, U.S. homeowners, on average, spend more than $9,400 per year in hidden homeownership costs, and maintenance expenses cost homeowners an average of $6,300 per year in unavoidable hidden costs, according to MarketWatch. These include things like homeowners insurance, property taxes, and utilities. So, this is one of the best home buying tips to help you stay out of a bad financial situation.
Before making a home purchase, you should think about how much the home will cost you in the long run. There are many ways to think of this, such as:
Property taxes. These vary widely from town to town. You may find yourself looking at two similar houses with similar price tags, but the property taxes may vary by thousands of dollars annually. That is a LOT of money. While it may seem small when compared to the actual home purchase price, remember that you have to pay property taxes annually, and a difference of just $3,600 a year is $300 a month.
Gas. Many homes use gas to run the hot water heater, the stove, and so on.
Electricity. Generally, the bigger your home, the higher your electricity bill.
Sewer. This isn’t super expensive, but it is generally around $30-$50 a month.
Trash. This isn’t super expensive either, but it does cost money.
Water (and possibly irrigation). Depending on how you use water and where you live, water bills can vary widely. I know many who live in areas where the average water bill is a few hundred dollars each month.
Home insurance. Home insurance can be cheap in some areas but crazy expensive in others. Don’t forget to look into the cost of earthquake, flood, and hurricane insurance, and know that it can add up quickly depending on where you live.
Maintenance and repairs. No matter how old your home is (even brand new homes), repair and maintenance costs will eventually come into play. In fact, U.S. homeowners pay an average of $3,435 per year in annual optional costs, including house cleaning, yard care, gutter cleaning, carpet cleaning, and pressure washing. But, don’t forget about things like needing a new roof or other repairs that may come up! Those are big expenses that you will need to be able to save up for.
Homeowners association fees. This can also vary widely. You should always see if the house you are interested in is part of an HOA. Often, the fees are high and involve rules you may not like.
Home furnishings. Furnishing your home can be done cheaply, but I know some who buy huge homes and can’t afford to put anything in them, such as a table, a bed, and so on. Why own a $500,000 house if you don’t have any furniture?
Always remember to add up the total cost when deciding to buy a house!
Estimate how long you will live in the area.
This is one of the home buying tips you might not think of because you are so anxious to be moving. How could you possibly think about moving again already?!
One of the best tips before buying a house is to think about how long you will live there.
Here’s why this is important to think about – it usually takes around five years to recoup the costs you paid to purchase a house. If you only live in a house for one or two years, then you may lose money on closing costs, due to the volatility of the real estate market, and more. Plus, it usually takes some time and legwork to buy a house, so you may not want to do it again so soon.
This is why you’ll want to think about how long you’ll be living in the area before you purchase your home.
You’ll want to make sure that the house will be suitable for you for at least five years, so you’ll want to think about things such as:
Are you happy with the area?
How are the schools?
Is the house big enough if you plan on starting a family?
Do you plan on working in the area for at least 5 years?
And so on.
You really need to think about your future when deciding to buy a house.
Don’t feel rushed.
“How long should you give yourself to buy a house?”
This is one of the home buying tips that is hard during a seller’s market, which is what’s happening in many areas right now. Knowing that homes are selling very quickly, you may feel rushed to find a house and put an offer in.
It’s also tempting to jump on a house the minute you find something you like, but if the purchase can wait 24 hours, then you may want to delay it. This will allow you more time to think about the purchase, go over your budget again, let any butterflies you have about the home purchase go away, and so on.
You will be able to make a much more rational decision if you think about your decision for at least 24 hours.
Plus, for all you know, you may even realize that you don’t want the house at all!
Do you really need or want that home?
“How do you make sure you get the house you want?”
Finally, the last of my home buying tips is to think about whether or not you actually need the house you are about to buy. It sounds easy enough, but many people do not even think about asking this question. When in fact, it is one of the most important questions to ask when buying a house (or any large purchase for that matter).
Really dig deep and ask yourself this simple question. Sure, you might think you want the house, but have you also been able to spend time thinking about the rest of my tips?
Do you know the full cost of the house? Are you okay spending that much? Does the house have everything you need?
Purchasing a home is a huge investment, and it deserves a lot of time and thought for you to make the best decision.
Have you bought a home recently? What other home buying tips should people think about?
Inside: Are you thinking about moving out? This guide will help you figure out how much money you need to save and where to find affordable housing. Will $5k be enough to move out?
Moving out for the first time is a huge milestone. It’s a chance to start fresh, create your own space, and live on your own terms.
But it can also be a daunting prospect, especially when you’re trying to figure out how much it will cost.
You want to know if $5,000 is enough to move out?
But there are a lot of factors to consider before making the decision to move out, and we’ve laid them all out for you in this ultimate guide.
So whether you’re just starting to think about moving out, or you’re ready to start packing your boxes, read on for everything you need to know about making the big move.
How much money do I need to move out?
Experts recommend having at least $6,000 to $12,000 saved up before moving out.
However, it’s possible to move out with as little as $5,000 if you focus on knowing how to live cheap and have a stable source of income.
However, if you don’t have a job before moving out, the need for a huge savings account is huge.
How much money should I have if I want to move out?
The minimum amount of money required to move out will depend on where you plan to live and your living expenses.
Shortly you will learn factors to include initial moving costs, rental deposit, and ongoing costs like rent, utilities, and food.
If you are looking to move out in an HCOL area, then you will need more than an LCOL city. At this point in your life, it is important to understand HCOL vs LCOL and how it affects your finances.
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What are the expenses you should consider when moving out?
Moving out on your own can be a daunting and expensive task.
There are many expenses to consider when budgeting for your new place especially when you are learning how to move out at 18.
This guide will help you estimate the cost of moving out and provide tips on how to save money.
1. Rent/Utilities
The cost of rent varies depending on the location and size of the apartment or home, with the median rental cost in the US being around $1700 per month.
Along with rent, utilities like electricity, gas, water, and internet can cost around $400 per month.
To save money on rent and utilities, consider finding roommates to split costs or negotiating with landlords for a lower rent.
Rent is your biggest expense when figuring out the ideal household budget percentages.
2. Rent Deposit
When renting an apartment, you will typically need to provide a rent deposit. This deposit is a sum of money paid upfront to the landlord to cover any damages or unpaid rent at the end of the lease.
The cost of a rent deposit can vary depending on the location and the landlord’s requirements, but it can range from $1,000 to $5,000 or one to three months of rent.
To save money on a rent deposit, consider looking for apartments with lower deposit requirements or negotiating with your landlord for a lower amount. A clean rental history will help you with this.
3. Moving Expenses
Moving out can be an expensive process, but with some planning and budgeting, you can keep costs under control.
When considering moving expenses, be sure to factor in the costs of moving truck, packing supplies, such as boxes and tape, as well as the cost of hiring movers
To save money on these expenses, try finding free packing materials on Buy Nothing groups or ask friends and family to help you move. You can also minimize your possessions and have less to move.
4. Renter’s Insurance
When moving out and renting a home or apartment, it’s important to consider getting a renter’s insurance policy to protect you from unforeseen events.
Home insurance, also known as renter’s insurance, is a special type of insurance policy that protects your property against losses or damage stemming from covered perils, including fires, storms, or theft. It can give you peace of mind and help you repair or replace your possessions in the event of unforeseen situations.
Insurance premiums are based on various factors, including where you live, how much you choose to insure, and your deductible. Your credit score and history may also affect your insurance rates.
5. Furniture and Appliances
When moving into a new home, it’s important to consider all the necessary expenses for furnishing the space. This includes appliances like a refrigerator, stove, oven, and microwave, as well as daily living items such as a mattress, table, and couches.
I remember when I moved into my first apartment by myself and there wasn’t a washer or dryer in the apartment. Just hookups. I had one of two choices: 1) rent from the management company for $35 a month or 2) buy new appliances with 0% interest for $35 a month. I choose option #2 and it saved me money in the long term.
To save money, consider buying used furniture from thrift stores or online marketplaces like Facebook Marketplace. You can also find plenty of free furniture if you are not picky.
By being thrifty and smart with your purchases, you can furnish your new home without breaking the bank.
6. Housewares
When moving out on a budget, it’s important to consider the essential housewares you’ll need to make your new place feel like home. Here’s a list of must-haves and their estimated costs:
By prioritizing these essential housewares, you can make your new place feel like home without breaking the bank.
Don’t forget to check out thrift stores and Facebook Marketplace for gently used furniture and household items. With a little creativity and resourcefulness, you can furnish your new home on a budget.
7. Internet and Phone Bills
The average cost of internet and phone plans varies depending on the provider and the plan you choose. However, you can expect to pay around $50 to $100 per month for internet and $40 to $80 per month for a mobile phone plan. In addition, there may be additional fees, such as equipment costs or activation fees, which can add up quickly.
To minimize these expenses, consider bundling services with one provider. Many companies offer discounts for bundling internet, phone, and cable services.
8. Credit Card Payments
If you thinking about moving out and are currently swaddled in debt, then you probably don’t have enough money to move out. If you have high-interest credit card debt, prioritize paying it off before moving out.
Automating savings on essential bills using Truebill can also help you manage your credit card payments while covering the costs of moving out.
Additionally, ensure that you have an emergency fund and enough money to stay a year to handle unexpected expenses.
Things may get harder if you have to pay for college without help from parents.
How to calculate your moving out budget
Moving out on your own requires careful planning and budgeting.
To calculate your moving-out budget, start by determining your monthly expenses once you move out. Make sure to include the factors discussed above.
Then, decide on your target move out date.
Now, figure out how many months you have to save.
For example, if your target move out date is in 6 months and you need to save $5,000 to cover your expenses, you’ll need to save about $833 per month.
Additionally, create an emergency fund to cover unexpected expenses such as medical bills or car repairs. Aim to save at least 3-6 months’ worth of expenses in your emergency fund.
By creating a detailed monthly budget and sticking to it, you can ensure that you can afford to live on your own and achieve your goal of moving out.
Tips and tricks on how to move out
So, you’re finally ready to move out and start your life as an independent adult.
But before you can start your new life, there are a few things you need to take care of first – like, you know, finding a place to live and figuring out how to pay for it.
Learn the lessons from those who did not move out with enough cash – like me.
Tip #1: Create a Budget and Stay Within Limits
Moving out with only $5000 can be challenging, but creating a budget and sticking to it can make the process much easier.
To start, subtract your monthly bills from your monthly income to determine your basic budget.
For instance, if you make $2500 per month and pay $1500 for rent and bills, you have $1000 left for living expenses.
Allocate $400 for groceries and other necessities, $200 for transportation, and $100 for utilities.
This leaves you with $300 for entertainment and other non-essential expenses.
To stay within your budget, consider using a budget binder to track your income and expenses.
Be mindful of living within your means and avoid overspending by resisting the temptation to spend your first paycheck on new household items or entertainment. Instead, opt for more affordable options such as walking around your new neighborhood or having a picnic in the park.
Tip #2: Reduce Expenses Where Possible
One of the hottest topics is becoming frugal green. To save money and the environment at the same time.
When it comes to furniture, try buying used or refurbished items or borrowing from friends and family. Additionally, cutting back on unnecessary expenses such as dining out and entertainment can free up more money.
By being resourceful and creative, it is possible to move out on a budget without sacrificing quality or comfort.
Remember to allocate 50% of your monthly pay towards necessary expenses, 30% towards things you want, and 20% for debt repayment and long-term savings.
Tip #3: Look for Low-Cost Rentals
Finding low-cost rentals can be a challenge, but there are several options available to those who are willing to be flexible and creative.
Renting a basement suite or studio apartment can be a more affordable option.
Consider couch surfing, subletting, or home-sharing arrangements.
Home-sharing can be particularly attractive as it allows you to pair up with an elderly homeowner who needs a little extra help in exchange for low rent.
Find a tiny home rental.
If you don’t mind sharing the space, you can also consider getting a roommate or looking into pod shares. Pod shares are co-living spaces where individuals rent a bed in a shared room, with access to other community spaces like a bathroom and kitchen.
Become a housesitter and be paid to move out. Learn more with Trusted Housesitters.
With a little bit of research and creativity, it is possible to find low-cost rentals that fit your budget and lifestyle. Remember to determine exactly how much you can spend on rent and be open to alternative housing solutions to help keep your costs at a minimum.
Tip #4: Look Into Getting Renters Insurance
When renting you are more than likely going to live closer to others, which means more things can go wrong. Don’t skip out on renter’s insurance, as it can provide the peace of mind and protection you need as a first-time renter.
Without renter’s insurance, unexpected disasters such as fires, storms, or theft can leave you with thousands of dollars in damages that you would have to pay out of pocket.
Renter’s insurance typically costs around $20 per month and can save you a lot of money in the long run. Some affordable options for renter’s insurance include Lemonade, State Farm, and Allstate.
It’s important to shop around and compare policies to find the best one for your needs and budget.
Tip #5: Plan for Emergencies and Unexpected Expenses
It is crucial to plan for emergencies and unexpected expenses.
Start by setting aside a minimum of $1000 for an emergency fund.
Ideally, you should aim to save at least three to six months of living expenses in a rainy day fund. Remember, having a contingency plan and emergency fund can provide peace of mind and protect you from financial hardship.
Tip #6: Start Saving for a Security Deposit
Remember to prioritize saving for a security deposit by setting a specific savings goal and putting aside a portion of your income each month before you move out!
With dedication and discipline, you can reach your goal and move out with confidence.
More than likely, if you are a good tenant, you should get your full security deposit back after your lease is over.
Tip #7: Start a Side Hustle
Starting a side hustle can be a great way to earn extra money while still maintaining your full-time job. You can earn extra income through various side hustles depending on your skills and interests.
The most common side hustles are online jobs, such as transcription, virtual assistance, proofreading, blogging, freelance writing, data entry, graphic design, and web design. These jobs are flexible and eliminate the need for driving anywhere, requiring only a laptop or computer and a good internet connection.
In fact, learning how to make money online for beginners is a trending topic.
As you start your side hustle, put in as much time as you have available to maximize your earnings. Remember that a side hustle is unlikely to replace the need for a real job, but it can provide a great way to earn extra money and pursue your passions.
Tip #8: Plan Ahead and Create a Timeline
When planning to move out on a budget, it’s important to create a realistic timeline.
Start by mapping out all the expenses you’ll need to cover, such as rent, utilities, food, and transportation. Along with how much money you have already saved for unknown expenses.
Stay organized by keeping a checklist of everything you need to do and when it needs to be done. Don’t rush the process – take your time and make sure you have everything in order before making the big move.
Remember the millionaire quote, failing to plan is planning to fail, so take the time to plan ahead and create a realistic timeline.
Is 10000 a good amount to move out with?
According to various sources, $10,000 is generally considered enough to cover moving out expenses and leave room for emergencies.
However, the actual cost of moving out can vary depending on location, rent prices, and cost of living.
Learn how to save 10000 in a year!
FAQ
There are a couple of different ways to save more money including:
Cut back on frivolous expenses like eating out and buying new clothes.
Sell anything you have that you don’t want or need on websites like Craigslist, Facebook Marketplace, Depop, or eBay.
Consider getting an extra part-time job or side hustle to increase your income.
When it comes to furnishings, be thrifty by asking friends and family if they have anything extra they’re getting rid of or checking out second-hand or discount stores.
Set saving goals and track your expenses using a spreadsheet. That will give you a clear picture of what is and is not possible.
Renter’s insurance is highly recommended, and in some cases, required by leases. It provides protection against unforeseen disasters such as fires, storms, or theft that can damage or destroy your possessions.
While it may seem like an unnecessary expense, it is usually affordable and can save you a lot of money compared to paying out of pocket for damages.
Not having renters insurance can leave you vulnerable to unexpected expenses and potential financial ruin.
You should not spend more on your rent payments than you are comfortable.
Just like with getting a mortgage, you should spend no more than 30% of your take-home pay on rent payments.
You don’t want to be stressed about finances, so you should set a realistic budget for rent that allows you to comfortably cover all of your expenses while still having some money left over for savings.
So, is 5000 enough to move out?
It really depends on your situation.
If you’re moving to a cheaper area and don’t have many expenses, you might be able to make it work.
However, if you’re moving to a more expensive city or have a lot of bills, you might need to save up more money.
When determining how much money is needed to move out, there are several factors to consider, which we covered above. These include where you plan to live, your living expenses, initial moving costs, ongoing costs, and emergency funds.
It’s essential to have a budget and do the math to determine the minimum amount required for a smooth transition to independent living on a tight budget.
Ultimately, it’s important to do your research and figure out what’s best for you.
Know someone else that needs this, too? Then, please share!!
It’s no secret home prices aren’t cheap. They may not be expensive either, depending on how you look at it, but they certainly aren’t cheap. It doesn’t take an economist to figure that out.
At the same time, mortgage rates are marching toward new all-time lows and inventory remains tight, which is keeping demand red-hot for prospective home buyers.
That means sacrifices must be made, but just what are those sacrifices? Well, fortunately Redfin did the legwork for us here.
Let’s take a look at these compromises to determine if it makes sense to be in this potentially frothy real estate market right now.
Paying More than Expected
This is perhaps always the case in real estate, or in anything that requires you to pay money in exchange for an item. We always pay more than we anticipated, either for emotional reasons or simply because we underestimated the cost.
The problem with a home is that paying more isn’t always an option. You could be maxed out at a certain price thanks to lender limits on DTI, or you could lack the necessary down payment at higher price points.
Whatever the case may be, buyers are being asked to up their ask if they want to land their dream home, or even their right now home.
In fact, home buyers are apparently making multiple offers on several homes at once in order to get one accepted. Sounds like things are getting a little out of control…
[Do you need 20% down to buy a house?]
Buying in a Different Hood
The next biggest compromise is searching for a home in an entirely different neighborhood. This can happen even if the real estate market isn’t on fire, as it is now, but it should give you pause.
Buying a home is a major decision and you shouldn’t just look elsewhere if you can’t afford a home in your desired neighborhood.
Of course, if you started your search with unreasonable filters, you may want to adjust your expectations and search in a realistic area. Just be sure not to forego the basics like a good school district and a low crime area. You may also want to avoid buying a home near these many things…
Purchasing a Small Home
We’ve all heard of that tiny home trend where you live in what looks like a trailer. It’s some kind of hipster millennial thing that maybe went too far.
Even if you don’t take it to those lengths, buying a smaller home because you can’t afford a larger one might not be a smart move. It might simply mean it’s not the best time for you to buy.
This is the third most common compromise buyers are making, but it can be a big mistake, no pun intended.
If you plan to start a family, you could easily outgrow your pad in a hurry, especially if you have twins. Heck, even if you don’t, it’s always nice to have one more bedroom, or one extra bathroom.
Keep in mind that if you buy the smaller home for right now, you might be looking for a new larger home before you know it, when prices are even higher.
Looking in the Burbs
The next most common compromise is buying further out of town. Redfin refers to it as buying in a “less walkable or transit-friendly community,” aka the suburbs.
It seems everyone wants to live in the city these days, but if you are planning/starting a family, the burbs could actually be a great choice.
The schools tend to be a lot better in the less “cool” parts of town, and that will mean a lot more to you once you have your fun running around the city. Parking is also a good thing…
At the same time, there is a fine line here – if the home you can actually afford or get your offer accepted on is an hour commute each way, you might want to pump the brakes on the purchase.
Settling for a C+ School
The final compromise is purchasing a home in a lower-rated school district. I just touched on the importance of schools, and this decision will come back to bite you in several ways whether you have kids or not.
If you do have kids, you might have to pony up for private school, which could easily outweigh the costs of buying in a nicer part of town, especially if you have multiple children.
Even if you don’t have kids, when it comes time to sell, there’s a good chance the buyer will care about the school district and that can affect your bottom line. In short, the things that you think about now will be the same things future buyers of your home consider.
The takeaway here is that there will always be compromises when it comes to buying a home, but if you find the compromises really beginning to stack up, you might want to keep on renting.
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