How to Live on Your Own

Be proactive, rather than reactive, in planning your personal living needs.
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If you've been living with your parents, a roommate, spouse or partner, making the transition to living on your own and being completely responsible for your life and finances can be intimidating. Not only do you need to deal with the social aspects, but you'll also need to manage all of the financial tasks such as building credit and living on a budget.

Calculate Your Expenses

Determine how much money you need to live on your own for the coming year. This will include expenses such as rent, utilities, groceries, phone service, auto maintenance, clothing, credit card payments and cable. The Better Business Bureau provides a comprehensive list of household expenses at its website to use for budget planning. If you've been living with parents, ask them and/or friends who have been on their own what type of household expenses you might not think of, such as laundry detergent, dish soap, cleaning supplies, towels and garbage bags. If you'll own or lease your first car, talk to someone about maintenance costs such as gas, oil changes, air filters and regular maintenance visits. If you are no longer on your parents' health insurance policy, find out how much it would cost to buy health insurance on your own or have your employer's plan deducted from your paycheck.

Develop a Short-Term Budget

Once you know your expenses for the year, create a budget that lists your monthly income and expenses. This will help you save money for months when your expenses will be higher, such as when a quarterly insurance policy comes due or during the holidays. Decide what you will do with any extra income you have, such as creating an emergency savings fund, paying down credit cards or contributing to a retirement account. Go grocery shopping with someone who knows how to pick the right items for a single person, based on your budget and whether you want to deal with leftovers.

Build your Credit

If you don't have a credit history or have had a joint account with someone else, start building your credit. Visit Annual Credit Report.com to get a free copy of your current credit reports. Review them for accuracy and correct any incorrect data that appear by following the steps at the specific reporting agency's website. Shop for credit cards that offer the best combination of annual interest rate, low fees and other perks, such as a late-payment grace period. Lenders evaluate your on-time payment rate and total amount of credit used compared to debt available to determine your credit worthiness. Use your cards even if you don't need them, making a purchase or two each month then paying off the balance in full. Keeping your balances low, such as below 25 percent of credit used, improves your credit score.

Learn to Cook/Clean/Maintain

Learn what you need to do to keep your house, apartment, auto, appliances or other items in working order. Leaving water on the floor near your shower, for example, can lead to expensive wood rot. Read the owner's manual of your car to learn when you need maintenance visits to avoid costly repairs. Learn how to clean and maintain appliances such as a washer, dryer, stove and heating and cooling units. Clean your showers and toilets on a regular basis before they get dirty to avoid difficult-to-remove stains. If you don't have money to dine out every meal, ask friends and family for tips on how to get started preparing your own food.

Develop a Long-Term Financial Plan

Once you feel you are ready to begin living on your own for the short-term, start planning your long-term financial needs. This includes saving for a home down payment, retirement fund, health and life insurance and children's college fund. Talk to a certified financial planner about your long-term plan to learn about different insurance policies, savings and investing options and the role Social Security benefits might play in your planning.

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