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Budgeting for a Post-Grad Move to a New City

Congratulations! You’re graduating and looking to plant roots and get started on your new career! Before you get too excited, though, let’s discuss budgeting for a post-grad move to a new city, so you don’t end up on your friend’s couch.

I wouldn’t be a good CFP® practitioner if my first words of advice didn’t include financial planning. So, the first step will be to plan for your move by researching your new city’s cost of living, especially rental costs. The cost of living in New York City is notoriously high, for example, while a move to Pittsburgh or Cleveland is much less expensive. Costs that vary by city include utilities, auto insurance, cable, internet and even groceries. (You may be surprised to find out that utilities are more expensive in Philadelphia than San Francisco.)

The most important cost variable to budget for is your rental cost. Not surprisingly, NYC tops the list of most expensive 1-bedroom apartments, with median rental costs at $3,780 per month. You could rent a 1-bedroom in Akron, Ohio for six months for about the same amount. Once you have an idea of what it will cost to live in your new city, you will need to put together a budget to ensure you have saved enough to make the move. There are two main components of savings to focus on: the total cost of the move and your emergency fund.

Total Cost of Moving

When you rent an apartment, the landlord may expect three months of rent upfront: the first month, the final month and a month’s rent to be held as a security deposit. Some landlords may also require renter’s insurance. I encourage you to get renter’s insurance even if it is not required by your landlord. It isn’t expensive, and it will cover liability (such as if a friend is visiting and falls down the stairs) as well as the contents inside your apartment that could be lost in the event of a fire. Expect to pay anywhere from $150 to $300 annually for this insurance. Finally, you need to budget and save for moving costs. This can be very inexpensive if it is a close move, potentially just the cost of a U-Haul truck and food and drinks for the movers (friends). If you are moving across the country, it can be very expensive and cost in the thousands.

Emergency Fund

Next, it is very important to have an emergency fund, which should equal 3 to 6 months of non-discretionary expenses — expenses that must be paid like utilities, groceries and rent. Having an emergency fund ensures that you get to stay in that nice new apartment even if something unexpected happens like a job layoff. The rule of thumb is single people with one income should have 6 months of expenses saved, while people in a relationship with two incomes can have just 3 months of savings. Given today’s economy, more conservative people may prefer to budget for 6 to 12 months of savings. These funds should be held in a savings account, not invested in stocks, bonds or Bitcoin.

A post-grad move to a new city is a rite of passage, and if planned properly, will be a fun and exciting start to adulthood and real financial independence. However, if not planned properly, there could be financial consequences that set an individual back for years. This could cause missed or delayed 401(k) savings, as well as the inability to save for a down payment on a house. As Ben Franklin said, “By failing to plan, you are preparing to fail.”

To ensure that you are prepared, find a CFP® professional today on

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