Leaving the Nest: 3 Tips for a Smooth Transition

Woman labeling moving box at home. Photo courtesy of Shutterstock.

As graduation day and taking on your first real job get closer, the realities of true adulthood and independence begin to show themselves. This may feel like a scary time, but like most young adults, you’ll simply learn how to handle situations as they come. But to get you started, these three tips will help manage some of the more pressing issues.

Medical Insurance

The Affordable Care Act of 2010 contains a provision that allows children to stay on their parents’ health care plan until age 26. This provision extends to children even if they are married, no longer living at home and not financially dependent on their parents. Thus, if your first job does not offer coverage as comprehensive as your parents’ plan, you can stay on it until your eligibility expires.

After you turn 26, you will need to look closely at health insurance plans. According to the Gallup-Healthways Well-Being Index, 55 percent of Americans get their health coverage through their employer. But, if your new job doesn’t provide health insurance, you need to look into your options. There is a special enrollment period that begins on your 26th birthday and continues for 60 days, so make sure you don’t miss it.

Also, keep in mind that health insurance is now mandatory for most Americans who can afford it under the law. Failure to have coverage either through your employer or government exchanges can result in fines that will be deducted from any federal income tax returns due to you.

Rent or Buy

Depending on who you ask, the general rule for financial responsibility is that your rent or mortgage payment should not exceed 30 percent of your gross income. The question then becomes whether you should rent an apartment or buy a home.

A survey released by Trulia in June found that 68 percent of millennials are currently looking to buy a home under $200,000. Despite this high number, Trulia’s lifestyle and real estate expert Michael Corbett believes that young people should hold off on buying, particularly if you’re job isn’t 100 percent secure. However, if you plan on staying at your job for at least five years, buying can be less expensive than renting and helps you build equity.

Regardless of which option you choose, there are still several things to consider. Roommates lower costs substantially, but you sacrifice privacy and autonomy. You’ll need to compromise on little things, such as how you decorate your place. You will need to discuss the style, price and functionality of furniture and accessories like curtains and end tables.

If you need help finding a place, services like Craigslist and ForRent.com can help you find a place in your new city. Also, Roomster is a roommate-matching service that connects you with similar people looking for a place in the same locale.

Money Management

No longer can you blow every cent you have on the latest gadgets, movies and night outs on the town. Budgeting is important when you have rent, utility bills and other monthly obligations that must be taken care of before anything else.

Mint Personal Finance is one of the most popular and comprehensive budgeting apps available. It helps you track all of your funds coming in and going out. Mint also allows you to sync your bank and credit card accounts to give you one-touch analysis of your complete financial state. Toshl Finance and GoodBudget are simpler personal finance apps for those just looking for a little help with budgeting.

Leaving home for the first time can be both exciting and nerve-racking. But the aforementioned advice will get you off to a good start.

Source: SocialMonsters