If you’re moving out of your childhood home for the first time, or even if you’re leaving dorm life to rent your first apartment, you’re probably pretty excited. It is, in fact, a big step toward the rest of your life. However, if you want it to be a good experience, you will need to prepare for life with bills and other living costs. 

Developing a few key financial skills will help to keep you from becoming overwhelmed within the first month of being on your own. Here are a few budget-friendly financial tips to get you started off on the right foot, presented below for Average Joe Finances readers.

Build Your Career

Your career is going to provide your most consistent source of income so it’s important you devote as much time as you can to nurturing and building it. This starts with the interview process. Learn how best to prep for an interview. Nowadays, that may mean prepping for doing an interview over Zoom. Once you’ve landed a job, learn as much as you can in that position and then take advantage of performance reviews to show what you know and use those skills to negotiate for promotions and higher pay. 

Get Basic Insurance

Yes, you’re young, but things can still happen. That’s why it’s essential to get the right kind of insurance. Look into your options for health insurance, and sign up for a plan that will cover you for regular doctor visits and in the event of an accident. If you don’t have any serious health issues, you should be able to find a plan with a reasonable monthly premium and deductible. 

You should also consider getting better auto insurance than the minimum policy in your state. If you do some research, you might be able to find an affordable plan that covers a number of scenarios, such as comprehensive, personal insurance protection (PIP), and so on. 

Take Care of Your Car 

Along with getting good auto insurance, it’s also important to keep your car in good condition so that it lasts longer and saves you money in the long run. Performing regular maintenance yourself is a budget-friendly way to keep your car running great, and you can find tons of deals on car maintenance parts and products. What’s more, you can often stack the savings using coupons and cashback offers from deal sites. 

Develop Your Budgeting Skills 

When it comes to personal finances, budgeting is the most foundational skill you can learn. In its most basic sense, a good budget includes your monthly expenses and income, and it helps you adjust your spending so that you can stay out of debt and save money. If possible, learn how to create a budget before you move out. If you’ve already moved out, learn it as soon as you can.

Something you may also want to consider as you draft your budget is that certain things are a luxury. While you were living at home, you didn’t have rent. But now, you have to set your priorities. These are housing, your vehicle or other forms of transportation, food, and utilities. Everything else is a luxury. That does not mean, however, that you should not budget some discretionary spending. Something as simple as giving yourself $10 per week for a few stops at your favorite coffee shop can help you feel as though you aren’t working just to exist.

Save for an Emergency Fund

Saving is another critical habit to form, and if you learn to prioritize it when you’re young, you can prevent a lot of financial troubles and put yourself in a position for success down the road. Start by saving an emergency fund of $1,000 for unforeseen costs like job loss, medical bills, and car repairs. Once you hit that mark, work your way toward having three months’ worth of expenses put away, and then six months’ worth of expenses. 

Get Your Credit Started

Paying cash for things is great, and it’s a solid way of staying out of debt. However, there are certain things in life where you will want to have some credit history built up, such as buying a home and getting other types of major loans. The higher your credit score, the more favorable your loan terms will be. Apply for a student or secured credit card, use it for a couple of purchases, and pay it off on time each month. And if you have student loans (or any other kind of loans), make sure you’re making those payments consistently.

Another way to start building credit is to ask your parents or grandparents to add you as an authorized user on their credit card. You don’t have to use their line of credit, but their positive payment history will show up on your credit report.

Segment Your Money

Segmenting your money is the act of putting funds aside for specific purposes each month. It is similar to creating a budget. Most banks offer free bank accounts. You can open as many as you need to keep your money separate. You might, for example, have accounts set aside for paying your monthly bills, for savings, and, as you increase your income, for travel.

Live Within Your Means

Perhaps the most important skill you can learn as you navigate personal economics is living within your means. In other words, do not overextend yourself, whether that means renting a larger apartment or buying a more expensive vehicle than you can afford. Many young adults get caught up in the idea that they have to live in a certain ZIP Code, drive a certain car, or wear certain clothing. You don’t. Although these things are nice, they do not benefit you in the long term. There are many ways to enjoy life without running your account down to zero. Just a few of these are to cook at home more than you dine out and to utilize public amenities, such as city parks and free concerts, that won’t require you to pull out your wallet.

Having some basic financial skills when you move out can help the whole experience be smoother. Look into getting important insurance policies, and perform regular maintenance on your vehicle. Learn to budget, save up an emergency fund, and start building your credit history responsibly. Not only will acquiring skills like these improve your current day-to-day life, but it will also help to set you up for success in the future.