The time before the end of tenancy date approaches is marked by stress and anxiety. Whether you plan to move to another rented place or own a house/apartment, you have to consider the expenses and plan the move according to your savings. As a tenant, you don’t always have the option to move when you have financial stability. Therefore, you should start planning your expenses and save for a move at least six months before the end of the lease.
Considering this, how much money should you save before moving? Expert financial advisors suggest following the general 50-20-30 rule. According to the rule, 50 % of your household’s earnings should be spent on living expenses, 20 % should be saved for future goals, and 30% should be spent on leisure activities.
You can tweak the percentages according to your short, medium or long-term savings goals. As, in most cases, time is a constraint when planning to move. Therefore, you should treat saving for a move as a short term goal, and cut back on leisure expenses and save as much as you.
Consider the Expenses Associated with Moving
When your lease is about to end, your most pressing task financially should be to assess the expenses associated with moving and create a budget for better control. Whether you shift locally or interstate, moving to or within Sydney can be expensive. If you plan poorly, you can end up depleting your saving within a few months, as the cost of living in Sydney is higher than any other city in Australia. You have to consider the expenses of the listed things.
These costs include the money you need to save for buying or renting the new place. In case you are purchasing a new house or apartment, you have to save for the down payment, home loan, stamp duty, registration, interior decoration etc.
If you are renting the new place, you have to manage application fees, security deposits, first month’s rent, etc.
If you are renting a new place, renters insurance is essential. In case you are buying, you have to get homeowners insurance. For moving, your hired removalists in Sydney may suggest you obtain moving insurance via third-party as well. So, research and add the expenses of getting your preferred insurance(s).
Hiring reputed removalists in Sydney
DIY moving is physically and mentally taxing. Therefore it is best to hire professionals who have experience of moving. Get in touch with reliable removalists in Sydney, and get to know their quotes to plan your expenses.
Utilities, amenities, and subscriptions
These are general living expenses you have to consider while moving. To save, you may discontinue a few utilities/ amenities/subscriptions for 2-3 months.
Costs of repairing/ maintenance, household goods, and fixtures
When you move, you may have to pay for repair/maintenance of the old or new property. Also, you may have to get new household goods and fixtures, especially if you are buying a new place.
End of lease cleaning in Sydney
At the end of the lease contract, it is necessary to get bond cleaning done to obtain your security deposit. So, add the expenses of hiring a trusted end of lease cleaning company in Sydney.
No matter how much you plan and budget, you will have random expenses. Therefore, it is essential to save for miscellaneous expenses like packing materials, refreshments or gratuities for the removalists, fuel for vehicles, moving equipment, storage unit rental, etc.
Write down how much you make monthly and yearly. Make a list of your expenses like utilities/ subscription fees, rent, premiums or EMIs, entertainment & personal expenditures, transport charges, cost of groceries & household items, etc. When you prepare this list, make two columns, one of the expenses that are fixed and the other of expenses that you can avoid.
Accordingly, calculate how much you can save monthly for buying/renting a new property.
In addition to this, you can use an online budget planner that can help you estimate costs accurately. You can find a variety of them online, but it is best if you research to know which budget-planning websites are reliable. If you are not comfortable with budgeting online, you can get professional assistance from an experienced financial adviser. Share your desire to buy or rent a new place.
Besides contacting a financial adviser, get in touch with a reputed realtor to get an accurate estimate of rent or purchase price of properties in your favoured locations. Once you have the estimates, the financial adviser will prepare your budget and tell how much you will need to save every month. Your financial adviser may advise you to take a loan for buying a house or check your eligibility for obtaining the first home buyer grant. In case you wish to rent a property, he/she can tell you the maximum amount of rent you can shell out weekly or monthly.
Methods To Save
To buy or rent your desired residence, you will need to set a minimum saving goal. Mentioned below are some tips on how you can save money for moving.
• A fantastic way to add to your saving account is to sell off old things by hosting a Garage Sale. You can start by decluttering your house. After you’ve decluttered, create three sets of items. Set #1 will have items to discard, set #2 two will have items to donate and set #3 will have items you can sell. The general rule is to price an item at 50% if the actual cost. However, you can decide to sell your belonging for what you think they are worth.
• Another way to save money is to downsize. You can sell things you either have duplicates of or don’t want anymore. These items can include kitchen utensils, appliances, furniture, vehicles, clothes, or anything of value.
• See if you can earn extra by doing overtime at work for a short while. You can take up another job as well, if possible.
• Be proactive. Although the more you save, the better, your aim should be to save at least 20-30% of your monthly income if you need to move out and buy/rent in 1-3 years. If you have time, start by saving 10% and gradually increase the percentage once you develop the habit of saving.
• When saving for moving, tighten your hand by spending on essential only. Cut back on expenses that can be avoided such as buying luxury items/services, dining out, compulsive shopping etc.
You should start saving for a move, as early as possible. The more proactive you are the better. But, it is imperative to understand, saving is an ongoing process. It doesn’t stop after you have booked your new place. You can save for unforeseen expenses by moving at a cheaper time. During peak seasons, hiring reputed removalists in Sydney can cost you more than it would during off-seasons. Besides this, if you can employ removalists in Sydney in advance, you can get discounts. Avoid booking removalists at short notice, as it will be more expensive.
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