I have crafted budgets to see if I am in a good spot to move out. Is saving $400 a month enough, or would I be better off staying at home?

Hi Money Minder,

So, I’m planning to move out in about 10 months once I clear off some credit card debt (lesson learned!), and I’ve put together some budgets to see if I can swing it. I’m 22, living in the southeast U.S., and working full-time as a manager at a big shipping company. I can do overtime whenever I want, but it’s usually not crazy, like 70 hours or anything. With some overtime, I pull in about $3,500 a month after taxes.

After calculating rent and all my monthly expenses, it looks like I can save around $300 – $500 a month, depending on how strict I am with my budget. This leaves me enough for groceries, gas, and other important stuff.

So, my big question is – is saving $400 a month enough? Am I spreading myself too thin here, or would it be better to just stick it out at home? Home life isn’t terrible, but I’m just craving that independence and, let’s be honest, cutting down on that one-hour commute sounds amazing.

Any advice would be awesome, thanks!

Cheers for now,

Response from THE MONEY MINDER:

Hello There,

Hello there!

First of all, I want to commend you on taking the initiative to create a budget and plan for your future. Recognizing your mistakes with credit cards and taking steps to pay off your debt is a significant first step toward financial independence.

Considering your income of $3,500 post-tax and the potential to save $300 – $500 a month, it’s evident that you are being diligent about your financial planning. Saving $400 a month may seem modest, but every dollar saved counts towards your goal of moving out and establishing independence.

When determining if $400 a month is enough to cover your expenses, it’s crucial to consider all the potential costs associated with living on your own, including rent, utilities, groceries, transportation, and other necessities. It’s also wise to have a contingency fund for unexpected expenses.

Given the information you provided, staying at home may provide a more financially secure option in the short term. However, if being closer to work and your girlfriend is essential to you, it could be worth exploring ways to boost your income or reduce expenses to increase your savings rate.

In conclusion, I recommend analyzing your budget meticulously, exploring potential ways to increase your savings rate, and considering all the costs associated with moving out. Ultimately, your decision should be based on what aligns best with your long-term goals and financial stability. All the best from THE MONEY MINDER as you navigate this exciting and challenging journey towards independence!