Making the jump from an apartment to your first home—whether it’s a condo or a house—is a huge, exciting move. It can also be an expensive one. But with steady saving and careful planning, you can keep costs under control. Laura D. Adams, personal finance expert and host of the Money Girl podcast, shares tips on how to create a budget and stick to it.
Whip Your Budget Into Shape
Create a checklist to inventory your belongings. Then, decide whether you want to hire pros or DIY your move. If you’re pressed for time, it’s usually worth getting movers; while they are more expensive, they are also more efficient. Adams also recommends going pro if your home layout is complex or if you’re not in peak physical condition. If you opt for movers, get estimates from at least three reputable companies (recs from friends can point you in the right direction, as can positive reviews from sites like the Better Business Bureau and Angie’s List).
Also factor in the cost of insurance for your belongings. “Even if you have renters insurance, it doesn’t always include off-site coverage—meaning if your valuables aren’t in your apartment, they’re not necessarily covered, or you may only get a percentage of the amount of coverage in your policy. So check your policy and be sure to add off-site coverage. Fully understand how much protection you have ahead of your move,” she says. (A GEICO agent can walk you through the specifics of your renters insurance policy.)
Smarten Up Your Saving
To ensure that you have enough cash to cover moving costs, Adams advises setting up an automatic transfer—either a percentage or a fixed amount per paycheck—and having funds go to a separate account. You should aim to start these transfers as soon as you start house-hunting, or at least six months out. In addition to the cost of the move, budget a little extra for surprises (see below).
Don’t Pay Double
In an ideal world, the end of your lease would sync up perfectly with the beginning of your mortgage. But life doesn’t always work that way. Give your landlord a heads-up as soon as you start looking for a home. Smaller management companies or solo landlords are more likely to cut you some slack if you can find a replacement tenant. Management for bigger buildings might require you to pay a day rate for the length of time the apartment is empty. Another option: Negotiate with the sellers to delay the closing date for your new place, or ask them to incorporate your lease-break fee as part of the closing costs.
Plan For ‘Uh-Oh’ Moments
A lot of the home-buying process is out of your control. For example, sometimes your closing date gets pushed back and you could be left scrambling for temporary housing. Plan ahead and figure out the range of costs for hotels and short-term apartment rentals, just in case. If this hypothetical becomes reality, you’ll also need to find storage for your stuff and pay for a second move. Booking a storage space near your new home can help cut extra expenses. If you can move small items in your own car, you can save on the amount movers will need to handle (or, if you’re DIYing, the size of the truck you’ll need to rent) for the second move.
By Sarah Bruning