Being an adult is expensive, and there are so many things you may not consider or even be aware of before adulthood that will cost you money. When you live with your parents, there are many things you probably don’t realize the cost of because it’s always just there in your home when you need it. The key to financial success in adulthood, regardless of age or income, is financial management. Learning how to budget and live within your means is the best option for living a comfortable life.
Here are some of the expenses you can expect as part of being an adult.
1. Monthly Expenses
Whether you rent or own, you will have monthly living expenses that will include either rent or mortgage. You will also have monthly utility expenses such as water, gas, electricity, phone, and internet. You can choose to save money by not having internet or cable, which is a good idea, but you have to have basic utilities like water and heat. The cost of your utilities can go up with little to no warning, and there is nothing you can do about it. There is also little you can do about bad service, and their customer service is often lacking. You may live in an area with terrible cell reception or internet that frequently loses its connection. You will not get a discount for bad service; you still have to pay whatever the company chooses to charge for their services. Your best option will be to research the area before you move. This is an easy way to estimate future costs and work that into your budget.
You are going to need homeowners or renters insurance, car insurance, and health insurance. However, it is important to understand that the cost of your insurance depends on several factors. For example, homeowners insurance is more if you have a pool or a fireplace, even if you don’t use them. Car insurance is going to cost more if you’ve had previous accidents or tickets. It may also cost more because of your age or gender. Companies like Geico, State Farm, Allstate, and Nationwide offer discounts based on your driving record, if you’re a good student, or if you’re a military member. You can learn how to find the best car insurance with companies like Insurance Tales.
The best thing you can do to save money is keep a clean driving record without speeding tickets or accidents, shop around for the lost monthly premium, and understand the type of insurance you need. You may go with state minimum coverage because it is the cheapest. Still, depending on the vehicle you drive, you may be better off with collision coverage, comprehensive coverage, or full coverage insurance instead of just liability insurance.
3. Vehicle expenses
If you are going to own a vehicle, you are going to have expenses beyond car insurance. You’ll need to figure out gas, oil changes, new tires, and other preventative maintenance needs. You will also need to know your car insurance deductible and have at least that amount in the bank for emergencies. That way, if you are in an accident, you have the money you need to get your car fixed. Hopefully, you have accident forgiveness with your insurance coverage, so an accident won’t make your premiums increase.
One of the best things you can do as a young adult out on your own for the first time is to learn the best practices for financial management. The sooner you learn to manage money properly, live within your means, and save for the future, the sooner you’ll experience financial peace and stability. You will need to learn about your credit report and what your credit score is. Websites like Nerdwallet provide great articles explaining credit and finances. Financial management includes budgeting, retirement, and living within your means comfortably. There are many useful tools available online to help with financial management.