Thrive, not Just Survive, When You Move Out

Dear Unc,


I’m in my early 20’s and live at home with my dad and younger brother. Most of my friends have moved out of their parent’s house and are living on their own. Some of them are really struggling, barely able to pay for food, and living on friends’ couches. Others seem to be doing really well and enjoying their lives. I love my dad and brother, but I feel like it’s time for me to move out. The problem is that I don’t want to struggle like some of my friends and barely survive from day to day. How can I move out and not end up couch surfing?

Nervous in Idaho

Dear Nervous,


You can do this. But it’s going to take some careful planning and preparation. You need to do three primary things to ensure that you thrive and not just survive. First, you must fully understand your personal finances. Second, you must have a steady source of income in place. Third, you must develop a budget that includes a savings component and stick to it for at least three months before moving out. You have to commit to yourself that your budget is a non-negotiable item.

There is no rush here. Other than going to college to live in student housing, most financial gurus will agree that 25 or 26 is a good age to be moving out of your house. Why so late some may ask? To give you time to save money, learn how to budget and handle finances. You can move out earlier with ease so long as you have these fundamentals in place.

Before you start putting your plan together, I want you to sit down and talk with your dad. Give him the gift of honesty and communicate your goal of moving out. The chances are that he will be highly supportive and assist you however he can. Lean on his experience and the experience of others to advise you. You are going to need a strong support network when you move out. Start cultivating it now.

To understand your finances, you have to first understand your expenses. What are your current expenses? Review your last three months’ bank statements and/or credit card statements to identify monthly debits such as Netflix, Amazon Prime, or other subscriptions. Also include all monthly consumer debt payments (credit cards) and installment payments related to a car, computer, etc. Now that you have a handle on your current expenses, build in your new projected expenses. These would include rent, utilities, phone, food, clothing, transportation insurance (health, vehicle, and renters), etc.

With your anticipated monthly expenses calculated, you will compare them to your current income. Have you had steady employment over the past six months? If not, wait to move out. You need at least six months of uninterrupted income under your belt and full confidence that your employment will remain stable in the foreseeable future before you decide to move.

After you have achieved six months of steady employment, total the amount of your take-home pay for that six-month period. Now divide the total amount of your total take-home pay by 6 to arrive at a six-month average monthly net income. Subtract your monthly expenses from your average net monthly income. If it’s negative, you need to look at ways that you can lower your expenses and/or increase your income. Perhaps you can find a compatible roommate or two to split rent and utilities. If you have consumer debt, you can keep living with your dad until it is paid off (something I would highly recommend). You can also look to see if you can generate additional stable sources of income. A second part-time job, dog walking, tutoring, baby-sitting, etc.

Let’s assume that you have a net positive after subtracting your monthly expenses from your monthly net income. Congratulations, you have achieved what is referred to as monthly disposable income! Ahhh, but you are not done yet.

Remember how we talked about making sure that you thrive rather than just survive? The only way to do that is to include a savings component into your plan. Don’t worry, you can do this!

Make sure that in your monthly expenses you are also including 3 items that are often overlooked. You need to include a monthly payment to an emergency savings fund to sustain a balance equal to at least three months of your total monthly expenses (preferably 6 months). You also need to include a monthly payment to your long-term savings plan (at least 10 – 20 percent of your gross monthly income). Finally, you should establish small monthly savings account for special occasions such as vacations, Christmas, birthdays, etc.

I’m going to direct you to the Resources Page and have you pull up the budgeting sections for Investopedia and the balance. These sites will be extremely helpful to you in developing your plan to move out. Also, check out the Personal Finance section of the library in the Books section. In particular, I would suggest that you get a copy of the “Broke Millennial” written by Erin Lowry and follow her blog at I also would like for you to follow JL Collins’ blog at and get a copy of his book “The Simple Path to Wealth,” because you are at the perfect age to start the path to true financial freedom. Also, keep checking out the posts here and in the video library as we build on the issues raised in your letter.

Finally, take six months after you have your plan in place to save up money for your move. Other than the money in your savings plan, you will need first and last month’s rent on hand when you sign your lease. This includes money for your deposit. You will also need to have a deposit ready for utilities. Scout out where you want to live and identify rental units. Check with the local police station to inquire as to the crime rate. Know what the parking situation is if you drive, the bus route if you are relying on public transportation, and the estimated commute time.

My hope is that this has not been too overwhelming. This is a very exciting time for you and I have every confidence that you will be successful. Keep me advised as you progress on your journey to independence.

All the Best,

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