15 Signs You Can Afford To Live Alone
Written by
Cindy Lamothe
Edited by
Gary Dudak
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For many, living alone is a luxury — especially if you live in high-cost cities. But it’s not within everyone’s reach.
If you’re currently sharing an apartment and craving the independence and privacy that comes with having your own space, there are some key signs to let you know you can finally afford it. Here are 15 key indicators to help determine if you’re financially prepared.
You Have Stable Income
Your income should comfortably cover all living expenses with room for savings. A good rule of thumb according to Abid Salahi, finance expert and co-founder of FinlyWealth, is the 50/30/20 budget rule.
“50% for needs, 30% for wants, and 20% for savings and debt repayment. If you can maintain this balance while covering solo living costs, it’s a positive sign,” he said.
Melanie Musson, finance expert with Insurance Providers, agreed that when you’re considering whether or not you can live alone, you need to determine if you can make up the rent you’re paying from your income. “If the answer is no, you’re not ready to live alone.”
Rent Is Affordable
Housing costs shouldn’t exceed 30% of your gross monthly income, said Salahi. For example, if you earn $5,000 monthly, your rent should ideally be $1,500 or less.
“Remember, this includes rent and utilities. You might need to stretch this to 35% in high-cost areas, but be cautious about going higher,” he warned.
You Have an Emergency Fund
Experts agree that before living alone, you should aim to have 3 to 6 months of living expenses saved. This fund should cover all solo living costs, not just your current share of expenses.
“For instance, if your projected monthly expenses when living alone are $2,500, aim for $7,500 to $15,000 in your emergency fund,” said Salahi.
Musson agreed this is an important factor to consider before going solo. “You should have a savings goal and contribute every month,” she said. “Will you be able to continue doing that if you have to assume all the costs of living by yourself?”
Your Debt Is Manageable
According to Salahi, your debt-to-income ratio should be below 36%. Your monthly debt payments (including projected rent) should not exceed 36% of your gross monthly income.
“High debt levels can make solo living financially stressful,” he said.
You Have a Consistent Surplus
After paying all bills and setting aside savings, you should still have some money left over every month. “This surplus provides a buffer for unexpected expenses or lifestyle adjustments,” Salahi explained.
You Can Cover Furniture and Setup Costs
You should also factor in one-time expenses for furnishing your new place. Create a list of essential items and research prices.
Depending on your preferences, experts say a basic furniture setup (bed, couch, dining table, etc.) can cost $3,000 to $5,000 or more. Do you have enough to cover that and not deplete your savings?
You’re Prepared for Utility Costs
“When living alone, you’ll bear the full brunt of utility costs — research average utility costs in your area,” Salahi advised.
For a one-bedroom apartment, he said to expect to pay at least $150-$250 monthly for electricity, water, gas and internet.
You Plan To Get Renter’s Insurance
This is often overlooked but crucial, Salahi added. “Budget for about $15-$30 per month for basic coverage.”
You Can Accept Increased Grocery and Household Costs
These costs often increase when living alone as you lose economies of scale. Salahi recommended budgeting an additional 20% above your current grocery spending.
You Can Afford Entertainment and Social Expenses
“Living alone might lead to more nights out or home entertainment subscriptions,” Salahi warned. As long as you can comfortably factor these expenses into your budget, you should be good to go.
You’ve Factored In Transportation Costs
If you’re moving to a new area, consider potential changes in transportation costs. For example, the added gas expense or taking additional public transportation can easily add up.
You Can Handle Healthcare Costs
Before you move, you want to make sure you’ll also be able to ensure you can comfortably cover health insurance and potential out-of-pocket medical expenses.
The last thing you want to worry about is financing a huge medical bill once you’ve relocated.
You Will Be Able To Keep Up With Retirement Savings
“Verify that your budget allows you to continue contributing to retirement accounts,” warned Salahi. “Aim to save at least 15% of your income for retirement.”
Your Career Trajectory Looks Promising
Experts recommend considering your career path and potential for income growth before making a big financial move like getting your own place.
“If you’re in a field with good growth prospects, you might be able to stretch your budget a bit more,” said Salahi.
You Can Ward Off Lifestyle Inflation
Assess your ability to resist unnecessary upgrades or purchases when living alone. Salahi cautioned that the freedom of solo living can sometimes lead to overspending.
“If you can confidently address these points within your current financial situation, it’s a strong indicator that you’re ready for solo living,” he said. “Remember, financial readiness is about more than just affording rent — it’s about maintaining financial health and progressing toward your long-term financial goals while enjoying the independence of living alone.”
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