Making the move to independence
Moving out of home is an exciting time with the freedom and fun of your new-found independence to enjoy. There are a few things to think about, however, before you make the big move.
You'll need to budget for van hire or a removal firm. Then you need a fridge and a washing machine (if you want convenience and to save money on laundromats).
You'll also need to ensure all the services such as gas, phone and electricity are in your name and that the meters are read on the day you move in to prevent any disputes with the previous tenants of your new property.
And don't forget to let everyone know you've moved. Tell your friends and family, any publications you subscribe to, your bank, insurance company, government agencies like Medicare and especially the Roads and Traffic Authority in your state or territory (this is especially important because if you commit an offence and you don't receive your fines, you can automatically lose your licence).
Whether you're renting or buying, living on your own or sharing with others, independence comes with its fair share of responsibility and costs. There are plenty of things you now have to take care of besides your washing, taking out the garbage, the washing up and cleaning the house.
Your living expenses include rent, food, bills like electricity, telephone and internet, furniture, bedding, towels and cleaning supplies. Don’t be afraid to shop around to ensure you get the best deals in supermarkets and from utility suppliers.
Insuring your place
When you’re faced with so many other expenses it can be tempting to cut back on the things you feel you can manage without. But it’s a good idea to protect your home and contents with insurance to guard against unexpected events like theft or fire damage.
Content insurance provides protection for all your possessions like CDs, DVDs, computers, furniture, clothing, and jewellery. If you buy a place of your own, home insurance covers the bricks and mortar, fixtures and fittings, and protects you from any damage to the building. You should check if you're in a flood area, or have a high fire rating, and make sure your insurance covers you for that too.
If you’ve decided that renting is the right option, you then need to decide what’s important to you. Do you like your own space or crave the company of others? Would you like to live near work or perhaps an area that has a lot of shops and restaurants? Is the area well serviced by public transport or is there parking for your car?
Sharing a house is a cost-effective option and, with the right mix of people, can be a lot of fun. The key is to sort out money issues with your housemates early on and agree on how bills will be split. That will make life a lot easier, because it will leave less room for doubt or misunderstanding.
Once you sign a tenancy agreement (or lease) between you and the landlord it's legally binding. So read it carefully and make sure that you understand and agree with all of its terms first. Generally, you should be entitled to privacy while you're renting the property and you should expect to have the place properly maintained and any faults promptly repaired. In turn, you’ll be expected to pay your rent on time, look after the place and cover any damage done to the property during the time of the lease.
You'll usually be asked to hand over a rental bond as a form of security for the landlord. This is generally the equivalent of up to 4 weeks rent. The bond is lodged with the Department of Fair Trading Rental Bond Board depending on which state or territory you live in. Once you go to leave, you'll get this back as long as you've paid your rent on time, looked after the property and there's no damage that wasn't there before.
When it comes to buying a home, the size of your deposit matters. The bigger your deposit, the less you'll need to borrow. If you have relatives who can help, you'll have your keys much faster. Some products are specially designed to allow your parents to help you get your first home or apartment sooner. However, if you're not cashed up, there are still other ways to home ownership.
Saving for a deposit for your home may seem daunting but with a bit of discipline it’s an achievable goal. You should aim to save between 3% and 10% of the purchase price to put down as a deposit. Any deposit smaller than 20% and you'll also be required to take out mortgage insurance which is another cost to keep in mind. Our GoalSaver account is a great option to help you achieve your dream of home ownership faster.
In recent years, first home buyers have been entitled to a $7,000 windfall. It applies to places bought for under $500,000 and it's called the Commonwealth Government First Home Owner Grant. Find out more about eligibility.
The amount you can borrow for a home loan depends on what you’re earning and if you have any investment income, how much deposit you are able to put down and your other financial commitments like car repayments, credit cards, personal loans and living expenses. We have a range of home loan options to suit your individual needs.
Additional costs of buying property include stamp duty which is a government tax that you pay when you buy property, as well as inspection fees, solicitor’s fees and loan set-up costs.
Find out more about the process of buying your first home, including a step by step guide and home loan basics.