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Team LXME

Team LXME

Spending

A job is the end game to the (at least) 18 years of education. All this while you’ve been sheltered at home. But now you’re an adult, and the world’s spoils beckon. Also, following a 7:30 pm curfew at 21 can be… er…

Either that, or an opportunity you cannot refuse knocks. Moving out isn’t easy, but adulting is much about answering these few burning questions before you walk out of your parents’ roof:

  1. Can you pay your own bills? Be sure that you can, in fact, support your own costs and bear your own burden. Start off by listing your monthly spends, and add all extra expenses you’ll incur when you move out. Include four crucials: rent, utilities (electricity, gas, water if you order that in too), commute, and groceries. Adopt budgeting as a monthly ritual when you move out. Eventually, and fairly early on, your monthly expenses should leave you something you can invest and also an amount for your emergency fund.
  2. Can you pay off your debts? Starting a new chapter in life doesn’t absolve you of your student loans. If you need to repay it, consider it as a high-priority expense in your budget. Make a debt payment plan by milestones – 1 year, 5 years, 10 years, etc. Discuss your options with your parents if you can pay them back the amount (which is usually interest free!) in return for them repaying on your behalf right now. If your income covers this, move out!
  3. Can you fall back on an emergency fund? Cardinal rule: always have an emergency fund. It must cover at least 3 – 6 months of your expenses or even enough to support a hospital emergency or a flight ticket back home. Stash it in a super-liquid investment so you can withdraw it at short notice but it still keeps growing while it’s squatting. How soon will your income allow you to do that? What’s Plan B in the interim?
  4. Can you bear relocation costs and deposits? When you move out, the first expense is your new place. If renting, make sure you have money that covers first and last month’s rent, an 11-month worth of deposit money, and agent’s commission (if any). Our advice – defer a house purchase another decade – start investing in the interim for a down payment, registration& stamp duty costs, etc.
  5. Are you a disciplined spender? Your folks may seem to be hyperventilating about knowing the cost of atta-daal. But if you tend to beg them to repay your credit card debt each month, maybe it’s time to reprioritise your expenses before accumulating credit card debt on your “always meagre” income. Moving away from the family and friends of your childhood can be intimidating, no matter the distance. Learn to make difficult financial decisions and you’ll see that it’s always worth flying out of the nest!

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