Updated: Sep 05, 2023

How Much to Save Up Before Moving Out On Your Own

As someone who wants to move out of the parents‘ house, find out exactly how much savings you should have before hitting this key life milestone.
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Moving out of your parents’ house is a major step in any young adult’s life.

It offers a new sense of freedom and independence.

On the other hand...

It also brings a huge number of new responsibilities and costs.

Not only will you have to do everything that an adult does, such as cook and clean, you’ll have to handle the financial aspects of having your own home, such as paying the bills.

Living on your own can be expensive, so you’ll want to save up before you take that leap.

Find out how much you should have in a savings account before you're financially ready to leave the nest.

The Costs and Benefits

Moving out brings a lot of freedom and benefits, but an equal number of costs.

And not all of the benefits costs may be obvious.

Living on your own (independence)

One benefit of moving out is learning to live on your own.

At some point in their life, everyone is going to need to live on their own.

Learning what that means, not only from a practical standpoint, but a social and mental one is important.

Can be expensive

One of the costs is that you won't be able to save nearly as much.

Or, if you have student loans, you won’t be able to put as much money towards paying them off.

Living on your own is expensive, so you need to balance the benefit of the extra freedom and experience with the potential to save more for the future if you continue living with your parents.

To be fair:

If you have a good relationship with the people in your home, staying there while you save up is not a bad thing to do, but the freedom of living alone can be a big draw.

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Know Your Expenses

If you’ve decided to move out and live on your own, you should start by determining what your expenses will be.


Rent is generally the largest expense for anyone who loves on their own.

Depending on where you live, rent can run from hundreds to thousands of dollars per month.

There are many rules of thumb surrounding how much you should spend on rent.

A good one to follow is to spend no more than ¼ to ⅓ of your income on rent.

That will leave you enough to handle other monthly expenses.

Many places will require that you provide a deposit when you sign a lease.

The size of this deposit can vary from state-to-state or city-to-city, but it can be quite hefty.

For example, in Boston, Massachusetts, you might have to provide the first month’s rent, last month’s rent, security deposit, and a realtor’s fee.

This can add up to a total of four months’ rent upfront. That’s before any other upfront costs like insurance and furniture.

Even at a minimum, you'd need one month's rent and security deposit.

You might need to save up for a while to be able to afford that expense.

Renter's insurance

Renter’s insurance is often recommended.

Many leases will require that you carry rental insurance to live in the apartment.

Some don’t have this stipulation, but renter’s insurance is still worth getting.

It costs just a few hundred dollars per year at most but offers tens of thousands of dollars worth of protection.


When you live on your own you have to make sure that the utilities stay turned on. That means you’ll have to cover the monthly utility bills.

You can expect to pay for heat, water, electricity, internet, and cable TV service.

Some apartments will cover the cost of some of these (most often heat or water), but others will leave you on the hook for all of them.

While you won’t have much choice of your water or electricity provider, you’re freer to choose an Internet or TV provider.

Shop around and make sure you get a good deal to keep the monthly bill low.


Living on your own means that you’ll have to fend for yourself when it comes to finding food to eat.

While no one will stop you from going out to eat or getting takeout for every meal, it can get expensive incredibly quickly.

Learning to cook is a much better option that can help you save a lot of money.

Learning just a few simple meals, like rice and beans, pasta, and curry can help you get to practice with basic cooking techniques.

They also provide filling meals that cost just a few dollars per serving. If you find that you enjoy cooking, you can explore more recipes as inspiration strikes you.

Cooking in bulk and saving leftovers is a good strategy. It makes it easy to reheat lunch or dinner rather than give in to the temptation to order takeout.

Build an Emergency Fund

Here's a big question

If you’re living on your own and lose your job or source of income, what will you do?

You’ll have to find some way to pay the bills.

That’s why you’ll want an emergency fund.

Once you’ve figured out how much you’ll spend each month, you can calculate how large an emergency fund you’ll need.

Ideal Size of an Emergency Fund

To start... Ideal goal... Super safe...
$1,000 3-6 months of essential expenses 12 months of expenses

Aim to have a minimum of three months’ expense saved before you move out. That will give you some cushion to fall back on.

Ideally, you’ll have close to six months’ expenses in your emergency fund.

Emergency funds aren’t just for protecting you if you lose your job. You might have to tap your emergency fund to handle a car repair or unexpected medical bill.

You should always try to have some money set aside for the unexpected.


To give you an idea of a single figure that you need to arrive at before moving out, here's an example:

Monthly rent: $1,000

Other monthly expenses: $1,000

First month's rent + security deposit = $2,000

3-month emergency fund = $6,000

Total = $8,000

In this example, you should have at least $8,000 saved before you can move out with a solid financial buffer.

Use the same approach to calculate exactly how much you need for your situation.

Where to Keep Your Savings

When you're saving up to move out and creating an emergency fund, you’ll have to keep your money somewhere.

The best place to keep your savings is...

An online savings account.

Online savings accounts offer great interest rates. Their rates are far higher than the rates offered by brick and mortar banks.

That means that your money will earn money, helping you reach your savings goal faster.

Another benefit:

It is very rare for online savings accounts to charge fees.

You’ll keep more of your money in the account working for you, and give less of it to the bank.

How to Build Your Savings

Saving money can be difficult.

You have to manage to find extra money in your budget, resist the temptation to spend it on fun, and remember to put the money into your savings account.

The best way to build up your savings is to make the process as automatic as possible.


One way to do this is to set up automatic transfers from your checking account to your savings account.

Saving even a small amount like $25 or $50 a month can get you on the path towards your goal.

Most banks will let you schedule recurring transactions.

Set up the transfer once and then money will be moved to your savings account each month without you having to do anything.

Partial direct deposits

To take things a step further, you can sign up for direct deposit to your savings accounts.

Many employers now allow you to split your paycheck into multiple bank accounts. If you take advantage of this, you can have money arrive in your savings account every paycheck.

This strategy can be even better than the automatic monthly transfers.


For one, the money never even shows up in your checking account. That removes some of the temptation to spend it because it never mixes with your spending money.

It also reduces the potential for overdrawing your checking account.

If you overspend one month and forget about your automatic savings transfer, the automatic transaction could overdraft your account. If that happens, you’ll have to pay an overdraft fee. These fees can be $30 or more, which can put a damper on your savings goals.

Whether you automate the process or not, making regular additions to your savings account is the best way to reach your goal.

Relying on interest alone will make the process very slow going.


Moving out on your own is an exciting time, but brings a lot of costs with it.

Estimate what you’ll pay for necessities like rent, food, insurance, and utilities.

You can use that information to decide how much you have to save to move out and how much you’ll want to have in your emergency fund.

When you do start saving, try to make the process as automatic as possible.