02
Acknowledgments and Disclaimers
Copyright 2016: Cover Page Illustration and the Hub.Careers Introduction
Reproduced courtesy of the Department of Labor, the Bureau of Labor Statistics
and the U.S. Copyright laws. Please see the Department of Labor for the latest
and most up to date information.
This source has been specifically reviewed, chosen and curated for relevance and
quality by Hub.Careers and reproduced in PDF format for the exclusive use of our
select Members and audience.
This Ebook is for informational purposes and is not intended as a substitute for
professional job and career counseling.
Hub.Careers does not assume and hereby disclaims any liability to any party for
any loss, damage, or disruption caused by errors or omissions, whether such
errors or omissions result from negligence, accident, or any other cause. By using
this publication you are agreeing to assume sole responsibility for any errors
whatsoever, including in formatting, timeliness and accuracy.
Hub.Careers is a website and service owned, managed and operated by TriStone
Consulting Group, LLC.
www.Hub.Careers
03
On your own:
Becoming self-sufficient
Table of Contents
05 ............. Are you ready to live on your own?
06 ............. The essentials of autonomy
18 ............. For more information
www.Hub.Careers
04
On your own: Becoming self-sufficient
Dennis Vilorio | March 2016
What does independent living mean to you? For young adults, the answer varies.
Many high school graduates go off to college, living in dorms with roommates.
Others enter the labor force right away, perhaps moving into an apartment of their
own. Whatever their circumstances, young adults leave home as they move further
into adulthood. In 2015, according to the U.S. Census Bureau, over half of people
ages 18 to 24 lived with their parents—compared with 15 percent of those ages 25
to 34.
Your first steps toward living on your own will be steadier if you know what to
expect and how to prepare for it. This article outlines some of the issues you might
face as you become independent, including managing your money, establishing
yourself at work, and finding a place to live.
Join us for Free! www.Hub.Careers
05
Are you ready to live on your own?
Living on your own, whether alone or with someone else, means you’ll be tak-
ing on new responsibilities. But it also offers a chance to grow. The following are
among some of the considerations of what’s ahead.
Expenses. Self-reliance starts with financial independence. But as table 1 shows,
typical living expenses add up. According to the U.S. Bureau of Labor Statistics
(BLS), housing alone accounted for about one-third of total expenses for young
adults in 2014. Transportation and food costs were another one-third. “You soon
learn that you can’t have everything you want,” says Tim Ranzetta, founder of a
personal finance business.
Table 1: Average expenditures by age group, 2014
Category Under 25 25-34
Housing $11,459 $17,404
Transportation $6,167 $8,908
Food $4,423 $6,632
Education $2,721 $1,087
Pensions and Social Security $2,240 $5,341
Other* $1,462 $3,186
Entertainment $1,319 $2,418
Apparel and services $1,285 $1,914
Healthcare $1,103 $2,659
Total expenditures $32,179 $49,547
* Includes cash contributions, alcohol, tobacco, personal care products and services, reading, life
and personal insurance, and miscellaneous expenses.
Source: U.S. Bureau of Labor Statistics, Consumer Expenditure Survey.
www.Hub.Careers Free Career eBooks!
06
Freedom. If you’re like many young adults, you look forward to the freedom
promised by becoming independent. Living on your own offers greater control over
your life: where to go (and with whom), what to do, when to come home, and so
on.
Self-growth. Life on your own gives you the opportunity to learn more about
yourself. You also develop skills, such as priority setting and meal planning, as you
navigate everyday living. A single decision, such as how to furnish your bedroom,
may come with a range of options and price tags. By learning about yourself and
considering your priorities, you discover what matters most to you.
The essentials of autonomy
Knowing you’re ready to be on your own is the easy part. Preparing to make it hap-
pen might be harder. This section outlines some of the financial, work, and housing
issues you need to understand to become self-sufficient.
Finances
Learning to manage your money is a crucial skill. Your financial situation can affect
many of your decisions. For example, how much can you spend on housing? How
often can you afford to eat out? Do you have enough savings to pay for a vacation?
Tracking and saving your money helps to keep you on solid financial ground. “You
don’t fully understand how much life costs until you have to deal with bills for the
first time,” says Katie Bryan, communications director for a financial services advo-
cacy organization. “You might have to save to afford the things you want.”
Free Expert Career Advice! www.Hub.Careers
07
Budgeting. Before you can manage your money, you have to know what your fi-
nances are. This begins with knowing how much income you’ll have every payday.
You also have to know how much money you owe and when you’re obligated to
pay those bills. Budgeting helps you see your financial picture more clearly.
To create a budget, add up your monthly income (including wages and tips) and
then subtract your monthly expenses (such as credit card bills, student loan pay-
ments, and groceries). How much money do you have remaining? Where do you
spend most of your money? Which expenses could you cut back on? Plan to adjust
your spending habits according to your circumstances.
Budgeting can motivate you to spend only what you can afford. “Your situation
probably won’t look as pretty as you might hope,” says Tammy Greynolds, the
communications coordinator for a nonprofit financial education campaign. “But by
being aware of your expenses, you can resist the temptation to spend money that
you really need for upcoming bills.”
Emergency fund. To give you peace of mind, you should budget some of the
money you earn each month for savings. Financial experts usually recommend sav-
ing enough to cover several months of expenses in case of unforeseen events, such
as a job loss or an extended illness.
www.Hub.Careers Free Groups and Forums!
08
For many people, however, saving such a large amount of money may seem daunt-
ing. Remember: It’s OK to start small. The important thing is to get in the habit of
saving. Experts suggest keeping at least $500 within easy access, such as in a check-
ing or savings account.
Retirement fund. Retirement can seem far away when you’re young, and it’s easy
to focus instead on other priorities—such as saving for a vacation, a car, or a home
down payment. Ideally, however, you should start saving for retirement as soon as
you have a full-time job.
Experts recommend that you start saving in your 20s and 30s. “Save as early as
possible to give your money more time to compound and grow,” says Ranzetta.
And don’t ignore your employer’s offer to match your retirement contributions, if
available. “That’s free money,” Ranzetta says. “Few things in life are as good as they
sound, but employer matching is.”
Free Job Postings! www.Hub.Careers
09
Credit. Establishing your credit has its benefits. It helps determine your credit rat-
ing as you repay money you have borrowed. Many landlords, for example, check
rental applicants’ credit ratings because they prefer to sign tenants with good
ratings. And you may receive better terms on credit cards and loans if you have a
credit history that shows you’re a responsible borrower.
To build good credit, experts recommend paying your credit card balance on time
and in full. Doing so helps you to not only avoid a bad credit rating but also the
pitfalls of accumulating credit card debt, including having to pay up to 25 percent
interest on the money you owe. Experts suggest that you avoid other high-interest
debt, such as payday loans, for the same reasons.
Approaching credit with caution is easier if you remind yourself that the money
isn’t yours. “People mistake their available credit for wealth,” says financial analyst
Richard Barrington. “It’s tempting to confuse the two, but credit is not money you
have. That’s money you have to repay, money you take away from your future.”
Taxes. Your income taxes are based on the amount of money you make. Once
you’re on your own and earning at least $10,300 annually, you are required to file
a federal income tax return with the Internal Revenue Service (IRS) by April 15. If
your income is under $62,000, you can file your federal tax return online for free
directly with the IRS.
The IRS has seven rates, or brackets, on which income ranges are taxed. The in-
come limits in each tax bracket vary by marital status and how you prefer to file
your taxes—for example, single or married filing jointly (with a spouse).
In addition, you must file a state tax return if your state taxes income. Many states
offer free online filing for their taxpayers, but some have income restrictions. You
may also file your taxes through the mail.
www.Hub.Careers Free Career Blogging!
10
Work
In addition to being your main source of income, a full-time job is where you spend
a large part of your time. According to BLS data, in 2014, employed people spent
an average of 7.75 hours on the job on days they worked—nearly one-third of their
day.
Finding a job with the pay and benefits you need to support yourself is an import-
ant part of being independent. Once you have a job, you will need to present your-
self professionally both during and after the workday. “Put your best self forward,”
says Greynolds. “It’s best to err on the side of caution from the start.”
Getting a job. To search job openings, especially postings online, look for oppor-
tunities that match your skills. Identify these skills by asking yourself some ques-
tions. For example, which of your everyday tasks apply to an occupation? What
special training do you have? What kind of work interests you?
Finding a full-time job that suits you takes time and persistence. Your network is a
great resource. Talk to friends, relatives, and colleagues who can offer guidance
Free Career Events! www.Hub.Careers
11
or connect you to prospective employers. Your school’s job center or alumni
association may also be a useful resource. Take the initiative to find as many leads
as you can.
When you look for a job, it’s important to have a realistic expectation of what you
might earn in your chosen occupation in a particular city or region. Jobseeking
decisions often depend on where you can find work. Employment for economists,
for example, is concentrated in Washington, D.C. Other occupations, such as regis-
tered nurses and secretaries, are more likely to be spread throughout the country.
Earnings and benefits. Employers pay a wage or salary for the work you do and
may also offer nonwage compensation, commonly known as benefits.
As table 2 shows, the number of workers and their earnings increase with age. This
is because workers in younger age groups may not be employed full time, year
round while completing their studies. Each of these age groups made less than
$825, the median weekly earnings for all workers over 16 years old. Median earn-
ings are the point at which half of workers made more than that amount, and half
made less.
Table 2: Earnings and number of workers by age group, 4th quarter
2015 averages, not seasonally adjusted
Age group Number of workers Median usual weekly earn-
ings
16 to 19 years 1,079,000 $410
20 to 24 years 8,736,000 $513
25 to 34 years 26,693,000 $743
Total, 16 years and over 109,913,000 $825
Source: U.S. Bureau of Labor Statistics
www.Hub.Careers Free Career Videos!
12
Employee benefits vary by employer and may be as important as your wages. These
benefits include compensation that an employer pays in full (such as time off for
vacation) as well as plans (such as health insurance and retirement contributions)
that an employer helps its employees pay for. Table 3 shows which benefits were
most accessible in March 2015.
Table 3: Access to selected employee benefits for civilian workers,
March 2015
Benefit Percent of workers with access
74% 74%
72% 72%
69% 69%
65% 65%
60% 60%
47% 47%
40% 40%
38% 38%
34% 34%
26% 26%
13% 13%
11% 11%
Source: U.S. Bureau of Labor Statistics, National Compensation Survey.
Be ready to negotiate for benefits as well as for salary. “You have to show that
you’re worth their investment,” says Greynolds, “and employers need to show that
they’ll take care of you.”
Free Career News! www.Hub.Careers
13
Dress code. Different types of employers have different dress codes. For exam-
ple, a financial services firm might expect you to wear a suit, but an information
technology company might allow a t-shirt and jeans. Ask your employer what kind
of attire you are expected to wear.
Workplace dress codes may have varying degrees of rigidity. Guidelines that cover
some of the main dress codes, including business casual and business formal, are
widely available online.
Social media. How you act in person matters to your employer, but so does the
way you appear online. On your social media accounts, set strict privacy settings to
keep your private life private. You may also have to ask friends and family to re-
move personal things you don’t want employers to find.
In contrast, make your professional presence online easy to find. Professional net-
working sites may help you find collaborators, connect with employees of a com-
www.Hub.Careers Free Career Sites!
14
pany you’d like to work for, and promote your skills. Setting up an online portfolio
with references and work samples, for example, shows prospective employers what
you can do.
Housing
When it comes to living on your own, you have two housing options: renting or
buying. (On the path to full independence, some people may choose to stay with
relatives for free or nominal rent.) Before committing yourself to something expen-
sive or long term, make sure you feel settled in your job and city of choice. “Jobs
don’t always work out,” says Barrington, “so give yourself some time to stay flexible
and learn what you like.”
Postponing a long-term housing commitment is common: Most young adults are
not homeowners. According to Census Bureau data, in the fourth quarter of 2015,
about 35 percent of young adults under age 35 owned a home—compared with
nearly 64 percent of all adults who owned one. Whether you decide to rent or buy,
consider location and other expenses in choosing where to live.
Location. Your housing search depends on the market in your area. If housing de-
mand is low, you may have a lot of spaces to choose from—and might even be able
to negotiate price. For example, landlords in low-demand areas may offer a free
month of rent if you sign a lease.
Free Career Polls! www.Hub.Careers
15
But in some markets, especially major cities, the opposite is often true: Demand
is high, limiting choices and pushing up the price. When visiting rental properties,
show prospective landlords that you’re ready and responsible by bringing a copy
of your credit score, a blank check, and a list of references. Before shopping to buy,
visit a mortgage lender and get preapproved for a loan.
Focus on what’s important to you. Consider price, the space, the commute, and
the neighborhood. You may pay more for a place near public transportation, for
example, but its location may include other conveniences, such as shorter com-
muting time. Visit different neighborhoods and walk around them to get a feel for
what they offer.
Security deposit or down payment. Renting or buying property nearly always
requires an investment upfront. You must have this money at the time you sign a
lease or mortgage lending agreement.
Landlords often require a security deposit, usually a month’s rent or some per-
centage of that, to pay for repairs or cleaning after you move out. The remaining
money, if any, is returned to you. A down payment is part of the total price of a
property you buy, with minimum requirements based on the loan type. For exam-
ple, loans insured by the Federal Housing Administration require a minimum down
payment of 3.5 percent of the purchase price.
Insurance. Insurance requirements vary for renters and homeowners. For exam-
ple, renters insurance is not usually required, but it’s relatively inexpensive and
protects your personal belongings against damage, theft, or loss from accidents
(such as fires and flooding). It also may cover your liability for damage to neigh-
bors’ belongings caused by an accident in your unit.
Similarly, homeowners insurance protects your belongings—which also includes
the dwelling itself—and provides liability coverage. Most lenders require home-
owners insurance as part of the mortgage. Homeowners insurance differs from
private mortgage insurance (PMI), which is usually required only when a down
payment is less than 20 percent.
www.Hub.Careers Free Career eBooks!
16
Utilities. The property you rent or buy uses basic utilities, such as electricity and
water. Rental properties may include the cost of some or all utilities in the lease, or
you might be responsible for paying utility companies directly. Homeowners usually
pay their own utilities.
For the utilities that are your obligation, contact each utility company to set up an
account. Utility bills are often accepted as proof of address for identification or
services, such as a driver’s license or library card. As with your rent or mortgage,
paying your utility bills on time helps you to maintain a good credit rating.
Other expenses. Setting up residency may involve other costs. For example, es-
tablishing telephone, Internet, and cable service are likely to be your responsibility.
Required fees for a community space or homeowners’ association may cost extra.
Trash and recycling collection may or may not be included in rent, fees, or property
taxes.
Another big expense that is indirectly related to your housing choice is transporta-
tion. In some locations, public transportation—such as buses, commuter trains, and
ferries—may be enough. But in others, you may need another mode of transpor-
tation. You can avoid the expense of buying, insuring, and maintaining a vehicle by
using car-sharing services, carpooling, or renting. Or you could consider alternative
methods for getting around, such as a scooter or a bicycle.
Join us for Free! www.Hub.Careers
17
Make the move
All the responsibilities of setting out on your own can make the effort seem daunt-
ing. But remember, you don’t have to do everything at once—and it’s OK if you
don’t get each detail right on the first try. “Approach each challenge piece by
piece, calmly and without pressure,” says Barrington. “Learn from your mistakes,
and you’ll come up to speed at your own pace.”
Being on your own is a big adjustment, Greynolds adds, so it’s a good idea to reach
out to others as you make the transition. “You’re not the only one who’s uncom-
fortable or scared,” she says. “Other people have had to deal with the same prob-
lems, and you can learn from their advice. You’ll find that people are more sup-
portive than you imagine.”
www.Hub.Careers Free Expert Career Advice!
18
For more information
To learn more about occupations that might interest you for a career, see the
Occupational Outlook Handbook (OOH). Each OOH profile includes detailed infor-
mation about job duties, wages, job outlook, and more.
For the most recent occupational employment and wage data by location, industry,
and more, visit the BLS Occupational Employment Statistics program.
Learn more about careers and your job search at CareerOneStop and the Job Seek-
ers Guide.
For apartment hunting, some websites collect and map listings to make the search
easier. For information about buying a home, the U.S. Department of Housing and
Urban Development can help.
To learn more about money management, visit:
• Saving Fitness
• America Saves
• Consumer Federation of America
• Consumer Financial Protection Bureau
• Next Gen Personal Finance
• Smart About Money
• Tax Help
Dennis Vilorio is an economist in the Office of Occupational Statistics
and Employment Projections, BLS.
He can be reached at (202) 691-5711 or [email protected].
Free Groups and Forums! www.Hub.Careers
