Moving out on your own – it’s a day that teens and young adults dream about, and it’s finally here. You’re ready to spread your wings and fly, but not so fast. Are you prepared for the financial reality that entering the world of independent adults will bring? Before you blindly take flight, settle back into the nest for a moment and make sure you are adequately prepared so that you don’t have to immediately fly back home.

Don’t Get Caught Off Guard

As you get ready to move out you’ve already prepared yourself for the expenses you’ll incur, such as rent and utilities, but there are some miscellaneous expenses too, such as furniture, groceries, and even garbage. Shop consignment and yard sales to furnish your new home, and cut down on the weekly grocery bill by clipping coupons, shopping sales, and meal planning. That weekly/monthly garbage fee isn’t great either unless you’re in an apartment where it’s included. Find a friendly neighbor to share the cost with, or haul it off yourself to the dump.

Being on your own brings other not-so-fun expenses too like insurance. If you’re age 26 or older, you can’t stay on your parent’s insurance, so shop around for plans that meet your coverage needs and set up a health savings account (HSA). Now might be a good time to think about life insurance too should the unexpected happen and your family needs help with medical bills or funeral costs. Sure, it’s a little morbid, but you can easily purchase it online and even use an online calculator to determine how much coverage you truly need. Being young means you’re likely to have very low premiums, more so if you’re in excellent health.

Establish a Sound Credit History

With popular cash apps like Venmo and Paypal, it’s easy to become financially invisible. Maybe your parents instilled fear in you about credit cards, or perhaps you never signed up for one, but a credit card is one of the many ways you can build up credit history to make life easier when you’re applying for loans. Get a credit card and/or store credit card, and make those payments on time. Have a parent or guardian serve as a co-signer for a loan and make timely payments, or ask them to list you as an authorized user on their account so that you build credit when they do. While you’re at it, check your credit score. You’ll need to know it to apply for a loan, and it’s a fast way to know if you’ve become a victim of identity theft.

Identity Theft Is Common
There are four groups of people with a high risk for identity theft, and you fall into two of them: young adults and social media users. As someone just beginning to learn the ins and outs of finances, being careful might not be your top priority. Be vigilant about checking your credit score, and never give out your Social Security or credit card number if it doesn’t make sense to do so. As for social media, be careful about how much information you divulge about yourself and utilize privacy settings, as identity thieves can use this to their advantage. If you suspect something fishy is going on, report it immediately to creditors, banks, the FTC, and the police.

Budgeting Is Important
Many think budgets are a waste of time, or perhaps you even think it’s a little bit nerdy, but having a solid budget is crucial for you to stay afloat rather than float back home. Living from paycheck to paycheck isn’t ideal (or sustainable), so create a budget and build up your savings. Create a savings account, consider sharing expenses with a roommate, and take your time so that you don’t make the move before both you and your finances are ready. If your budget is going to be too tight, put off moving until your budget and savings align.

Moving out on your own is exciting, no doubt. However, once the excitement dies down you’ll see how expensive being an adult really is. Take the tips above to heart, get ready, get set, go!

Learn more about Financial Literacy Tips for Young Adults.