Living Off-Campus: Hidden Costs of Leaving the Dorms

Moving off-campus can be great, but only if you know what you're letting yourself in for. You're counting on saving your room and board, about $9500/year at a typical mid-Atlantic state university. You already expect to pay rent, probably $600/month per room. However, what hidden costs lurk when living off-campus?

Living Off-Campus Hidden Cost #1 - Furniture

College dorms provide your basic furniture - bed, bookcase, desk, chair, and lamp. When you start living off-campus, plan on a furniture shopping spree. Depending on means and taste, this could be anywhere from $300 to over $1000 for the basics. Furnishing a living room, dining room, and kitchen will add $100-$500 per person.

Living Off-Campus Hidden Cost #2 - Utilities

In the dorm you flick on the light or turn on the faucet, with no bills for electricity, water & sewage, heating-oil or gas, etc. Living off-campus you'll get monthly bills for these. Unless your lease specifically states the rent includes utilities, plan on $75/month per person or more. Renting with fewer room-mates, that number will increase.

Living Off-Campus Hidden Cost #3 - Broadband, Cable, Phone

Many campus dorms provide cable, broadband, and phone service. When you're living off-campus, these can set you back $40/month per person or more.

Living Off-Campus Hidden Cost #4 - Groceries

One advantage of living off-campus is that you can prepare your own, healthier, meals. However, without the college meal plan, don't forget to add groceries to your "living off-campus" budget. Expect groceries to cost at least $200/month per person while living off-campus. If you're like most students, at the end of a long day of classes you'll be tempted to order in pizza or Chinese food. After several days you'll throw out groceries that have gone bad, increasing your next grocery bill.

Living Off-Campus Hidden Cost #5 - Commuting

Depending how far off-campus you live, you may face commuting costs. These could be minimal if you walk or ride a bike, manageable if you ride a shuttle or bus, or substantial if you commute by car. In this last case, budget for license and registration, auto insurance, gas, repairs and maintenance, and parking. Commuting also bites into your work/study time.

Living Off-Campus Hidden Cost #6 - Summer Rent & Summer Work Flexibility

Living on-campus you probably move back home for the summer. Living off-campus you'll pay rent when school is out too. Don't forget to budget for 12 months rent. Paying summer rent you'll prefer to live at your off-campus place during the summer, reducing your flexibility to work for uncle Bob, earning more than your on-campus job. The groceries, utilities, etc. will also continue weighing on your budget when mom and dad aren't picking up the tab.

Living Off-Campus Hidden Cost #7 - Taxes, Taxes, and more Taxes

Unless your parents are paying your "living off-campus" costs, you'll probably be working part-time to help pay for everything. As you earn more, you'll be taxed more. Your combined Federal, State, and local income taxes, plus Social Security and Medicare, may well exceed 25%.

Living Off-Campus Hidden Cost #8 - Savings

If you're living off-campus you're close to being independent, introducing the need to save. A good rule-of-thumb for college-age is to save 15% of whatever you earn. More is better. Although this is a "good cost" you still need to budget for it.

Living Off-Campus Hidden Cost #9 - Miscellaneous

Whether you live off-campus or on-campus, there's always something to buy. A new CD or DVD, tickets to that great show or movie, a new pair of jeans or sweater, new running shoes. Budget at least $100/month for all these and more. If you can avoid spending it all, add the unspent portion to your savings.

Living Off-Campus Annual Budget

Living off-campus, you need a budget. If you don't have better numbers, plan on $1000 to furnish your off-campus place; $7200 rent; $900 utilities; $480 cable/broadband/phone; $2400 groceries; $300 commuting (much more if you use a car); $2500 taxes (assuming $10,000 annual income and 25% overall rate); $1000 eating out/ordering in (assuming once a week at $20 each); $1200 miscellaneous.

Add it all up and you should budget about $17,000 for the first year, which is probably about 80% more than your college room and board cost. If you're frugal you may budget less the second year. Keep track of your expenses to avoid blowing your annual budget in the first two months.

Living off-campus can be a great experience and prepares you for life after college. However, if you don't take into account the hidden costs of living off-campus, you may quickly find yourself in deep financial trouble.