CEO Confidential

7 Rules for Managing Finances When You Start Living on Your Own

When you start out living on your own, it can be super tough to manage your finances for the first time. You have probably spent the rest of your life always running to your mom or dad for money and never having a sustainable income of your own. However, now that money tree has dried up for the most part and you find yourself needing to learn how to manage your own finances. If you don’t, you might find yourself in debt or without money to pay rent every month. Be sure to keep reading down below to learn the top seven rules to remember when managing your finances. You are going to be thankful that you took the time to sort this out sooner, rather than later.

  1. Set up your budget and stick with it, no matter what

The first rule that you need to remember when managing your finances is that your budget is your best friend. Setting up a budget is going to include you taking the money you make every month, taking out whatever expenses you plan on, and sticking with that plan, no matter what. If you create a great budget, then you are going to have no problem saving up money and keeping yourself from entering any sort of financial crisis. Once you make your first budget when living on your own, you should take the time to redo that budget every so often, depending on what changes come into your life. You might not need to buy so much furniture after your first few months on your own, so that money can then be spent elsewhere.

  1. Create a bill paying system and stick with it

When you’re living on your own, the bills are going to start coming in and they won’t stop. These are things that you have to start paying on your own now. This can come as quite a shock for those young people who haven’t had to pay for bills in the past. Your parents might have picked them up in the past, but that’s not the case anymore. Make sure to come up with a bill paying system that works for you and stick with it. You can take a small personal loan initially to pay off the bills. You definitely don’t want to be stuck with tons of bills that are unpaid and have to pay them later with much more interest.

  1. Be strategic when thinking about quality vs. cost when buying new things for your place

When you first move into your new place, you are going to need to buy some things. You might need to get a new bed for your bedroom, some cooking items for your kitchen, or some decorations to go around the living room. These are things that you should really think about when furnishing your apartment. However, you should determine whether the quality of what you’re buying is great for the price or whether you can find a better deal elsewhere. Don’t just go for the cheapest items because they are great for your budget. These items are just going to break down or need repairs/maintenance more often than those items that are bit more expensive, but of higher quality.

  1. Don’t think you need every single gadget or appliance to make your life great

When you first start living on your own, you might think that you need to get every single gadget or appliance to fill up your apartment or house. However, that’s not true at all. It’s a complete lie that you need these gadgets to make your life great. They are just going to dry up your bank account and because you have tons of financial problems. Make sure to think about what you really need and what you just want because it looks cool or will make your life easier. You can easily start saving up money for those items that you really want to get into your apartment, but they are not meant to be impulse purchases.

  1. Spend the time and money to maintain your appliances and other possessions

One of the worst things you can do to your finances is to not maintain your appliances and your other possessions. Maintaining your possessions and caring for them is going to be much less expensive in the long-run than paying for repairs that are going to cripple your bank account. For example, if you don’t take care of your fridge, you can guarantee that you’re going to be paying for expensive repairs in the future. And these can throw your financial life into such a disarray that you won’t know what to do with yourself. 

  1. Think about joining a borrowing network for all of your needs

If you don’t absolutely need something for your apartment and need to keep it there all of the time, you can think about joining a borrowing network. These are networks of neighbors, friends, and other people in your community. If you need something like a toolkit or a TV for a short amount of time, you can post in your community’s online page or group and see what you can find. This is a great way to save money, while still getting what you need for the amount of time that you need it.

  1. Prepare out your food for the week and/or preserve meals

One of the absolute best ways to save money and manage your finances well is to think about what you’re eating on a regular basis. What you eat every week can cut a serious debt into your bank account, so by thinking of ways that you can cut down on these costs, you are going to be seriously helping out your financial situation. You can do this by preparing your food in bulk at the beginning of the week, so you don’t have to spend so much money on eating out. Or you can even preserve your meals in the future and have tons of food ready to eat whenever you want.

There you have it! Managing your finances while you are living on your own for the first time is going to be a journey for you. However, when you are financially secure, you are going to find that your quality of life improves dramatically.

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Himanshu Agarwal
Himanshu Agarwal is the Founder & CEO of a Digital Marketing firm SmartWeb. He is an online market analyst, startup strategist and a writer.
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