Moving out of home for the first time is a big milestone for anyone. But while leaving the nest is an exciting step towards independence, it can also come with its fair share of challenges – not to mention expenses, such as rent, electricity and gas, as well as set-up and insurance costs.
Young Australians are staying at home longer. In 2021, 54.3% of men aged 18 to 29 were still living in the family home, compared with 46.6% in 2001. The trend is similar for women aged 18 to 29, with 46.7% living at home in 2021 compared with 35.9% two decades earlier.1
No matter when you decide to move out, the things that can make the transition as smooth as possible will likely be the same. In this article, we work through seven key steps to taking the big leap – from budgeting and finding the right home to learning what sort of contents insurance might be right for you.
1. Create a budget
Whether you’re setting up on your own, moving in with a partner or opting for student accommodation, moving out of home comes with several upfront costs. A detailed budget can be a great place to begin so you can better understand your financial position and your potential ongoing costs.
The Moneysmart Budget planner can be a helpful tool to understand your current expenses before you start factoring in future costs such as paying rent, bills and bond. This planner might also be useful if you need to save money before you move out.2
When considering how much rent you can afford, realestate.com.au says that many renters follow the 30% rule, which suggests allocating no more than a third of your income to rent.3 How realistic that is depends on your level of income and on the average rental price in your area. In many areas of Australia, rents remain stubbornly high.4
When creating your budget, Rebecca Pike, senior finance writer from Finder, recommends adding a buffer of at least three months’ worth of expenses. This can help cover unexpected costs, such as moving fees or emergency repairs.
“You want to make sure that if you get a big bill in those early months, like an unexpected car repair, you can pay it without stressing that you won’t be able to afford your rent,” says Pike.
2. Start house hunting
Once you have your budget in order, it’s time to start looking for a place.
Websites such as realestate.com.au and Domain can help you explore your rental options. When reviewing listings, remember to factor in things such as proximity to work, public transport and amenities, as well as the cost of rent.5
In such a competitive rental market, it’s also worth preparing your rental application in advance so you’re ready to go as soon as you find a suitable place.6 The property owner or real estate agency managing the rental will require documents such as proof of income, identification and references, so get these together before you start searching.7
3. Take the time to understand the lease agreement
Before signing a lease, it’s important to fully understand the terms. These will include the length of the tenancy, rent payment dates and the conditions for getting your bond back.
Taking the time to thoroughly review your lease can prevent disputes later and ensure that you’re prepared for any additional costs or responsibilities during your tenancy.
Your rights and responsibilities as a tenant depend on the laws in your state or territory. This list of government resources and tenants’ organisations is a good place to start:
- Australian Capital Territory: Justice and Community Safety Directorate
- New South Wales: NSW Government and Tenants’ Union of NSW
- Northern Territory: Northern Territory Consumer Affairs
- Queensland: Tenants Queensland and Residential Tenancies Authority
- South Australia: Consumer and Business Services and RentRight SA
- Tasmania: Consumer, Building and Occupational Services and Tenants’ Union of Tasmania
- Victoria: Tenants Victoria and Consumer Affairs Victoria
- Western Australia: WA Department of Energy, Mines, Industry Regulation and Safety
4. Plan for the move
Once you’ve secured a place, it’s time to plan the logistics of the actual move, from setting a date to deciding how you’re going to move your belongings. Pike says it’s easy to be caught out by the cost of moving, especially if you need to hire a removal van.
“If you have a friend with a van, ute or truck, ask them if they can help. Or, you can hire a van, truck or trailer yourself,” she adds.
5. Furnish your home gradually
It’s tempting to want to deck out your new space immediately, but buying everything at once can quickly drain your savings. Pike suggests spreading the cost of furnishing over several months instead.
“You probably don’t need to buy decor or plants straight away,” she says. “Start with essentials like a bed, fridge and couch, and then add smaller items later.”
Buying second-hand items from friends, family, second-hand stores or online platforms such as Facebook Marketplace and Gumtree can be a good way to furnish your home on a budget. Also, look out for community swap groups on social media or at your local community or neighbourhood centre, where people often give away furniture for free.
Remember to be mindful when buying items online – verify the legitimacy of the seller and beware of scammers offering deals that seem too good to be true.
6. Be prepared to pay bills and manage unexpected expenses
Bills such as internet, electricity and gas can add up quickly, so Pike says you might want to think about putting money away each pay so you’re not left short when your bills start coming in.
Most banks will allow you to set up separate sub-accounts to allocate money for utilities, which can make it easier to stay on top of payments.
Pike advises building a contingency of at least $100 into each week’s budget to cover one-offs and small expenses.
“There’s always those little costs each week, like grabbing some milk on the way home, that you might not have accounted for in your weekly grocery budget, but it all adds up,” she says.
“Then there’s little extras that you probably took for granted when you lived at home, such as condiments, which can be quite expensive when you’re adding them to your weekly grocery bill.
“If you can plan for around $100 above what you think you’re going to spend, then you will have some leeway. And, if you don’t end up spending the extra money, make sure you put it straight into your savings.”
Create your moving out of home checklist here.
Your moving out of home checklist:
7. Don’t forget about insurance
Once you’ve moved in, you’ll want to protect yourself against loss or theft of your belongings. It’s important to note that your landlord’s insurance will protect the building itself but won’t cover the items inside that belong to you.8 That’s where contents insurance comes in.
“This is sometimes referred to as renter’s insurance, covering loss or damage to your belongings and helping you get back on your feet after an insured event such as theft, fire, storm or flood,” explains Mervyn Hartley, Youi’s Head of Product for Home Insurance.
Youi’s renters insurance can cover personal belongings, including furniture, clothes, computers, fridges, televisions, tools and jewellery, for loss or damage caused by theft, earthquake, fire, flood, storm and impact.9
Moving out of home is an exciting step towards independence, but it can also come with financial and logistical challenges. From budgeting to preparing for the unexpected and securing the right contents insurance, being well prepared will ensure your move goes smoothly. To find out if Youi’s Contents insurance is the right fit for you, start a quote.
1 Source: Melbourne Institute – The Household, Income and Labour Dynamics in Australia Survey: Selected Findings from Waves 1 to 21, 2024
2 Source: Moneysmart – Budget planner
3 Source: realestate.com.au – How much rent can I afford?, May 2022
4 Source: ABC News – Queensland and South Australia lead the ranks in report that reveals most painful suburbs for renters, July 2024
5 Source: Qld Government – Choosing a rental property, July 2024
6 Source: Real Estate Institute of WA – How to stand out in a tight rental market
7 Source: realestate.com.au – What documents do you need for a rental application?, January 2022
8 Source: Canstar – What is renters insurance?, March 2024
9 See our Home & Contents PDS for full details.
