Budgeting Tips For Your First Apartment3 January 2023
Getting your first apartment is a special time. You may be moving out of a dorm or your parents’ house. You might be leaving that crowded loft you shared with five other people and were never sure who paid for what.
But taking on your first solo apartment means building a careful budget to ensure all your expenses are covered at the beginning and for the months and years that follow.
There’s a lot more to consider than rent alone. Here are some helpful tips for budgeting out your first apartment.
Know how much you can afford to spend on rent, as it will likely take up the highest percentage of your monthly budget. Average rent will vary depending on your location and the time of year. Winter is often the least expensive time to rent because people are less likely to move during colder months, and landlords don’t like empty units, but summer can be a good time to rent in college towns.
As you work on your budget, remember that rents across the nation have been in a considerable amount of flux due to the pandemic and changes in the housing market. Sites such as Zillow or Realtor.com keep current with data and can help you determine what average rents are in certain areas.
As for the rent itself, paying your rent on time each month is essential. It keeps things amicable with your landlord and improves your chances of being given a new lease when your current one expires or having the landlord provide you with a positive reference should you move elsewhere. Remember that most landlords will require a first and last month’s rent upfront and a security deposit.
Some apartments provide some utilities as part of the rent, which might help you save money. But when you’re budgeting, expect to have to pay for electricity, heat, and gas. When you call your local utility companies to set up your connection, make sure to put the accounts in your name, so there are no delays.
To help keep costs down, look for apartments with efficient appliances, furnaces, thermostats, and light fixtures, as well as good window insulation. By doing so, you can save a good percentage on your monthly bills, and those savings will add up over the year.
For an average one or two-bedroom apartment, expect anywhere between $250 and $350 per month on electricity, heating, and air conditioning. Much of this will depend on local weather and rates.
Finally, other utilities could come into play. Check to see if there are any additional services you need to pay for. Some rentals may charge a fee for parking, trash collection, and water use.
3) Cable and Internet
While these may seem optional, it’s hard to live today without cable or Internet access. Cable services can run you between $50 and $150, depending on the type of package you get. Add-ons will cost you more, but you can often save some money initially by taking advantage of introductory offers.
If you’re going to stream all your entertainment, you can get by with just an Internet connection. Depending on where you’re located and the kind of service available, this can often be significantly cheaper than cable. Still, the costs of streaming services such as Netflix, Hulu, HBO, and Amazon Video can add up quickly.
4) Other Starting Expenses
Moving is a one-time expense but should still be part of your first apartment budget. Depending on the distance and the amount of stuff you have, you could require professional movers and a healthy supply of boxes and packing supplies. Moving into a one-bedroom apartment can run you between $400 to $1,500 to move. A long-distance relocation could be as high as $6,000.
You also need to think about furnishings.
Even if you’re relocating with furniture, you’ll likely need more sooner than later. Bed, couch, kitchen table, and dresser are essentials. Your apartment budget should include storage, extra chairs, decor, kitchen supplies, and perhaps a small office space. Relatively inexpensive furniture and household supply sources can include outlet stores, thrift stores, and assemble-it-yourself furniture, as you might find at Walmart or IKEA.
5) Non-Apartment Expenses
Setting a monthly budget for your apartment should also take into account those expenses not directly related to your apartment. These expenses can include the following:
– Medical insurance
– Cell phone
– Student loan payments
– Credit card payments
– Car payments, insurance, and maintenance
– Public transportation (busses, trains, subways, etc.)
In addition, entertainment is important, so leave a little to go out once in a while to a movie, restaurant, sporting event, or something else along those lines. If you can budget it, consider a gym membership and renter’s insurance as well.
Overall Budgeting Tips
Knowing what to budget for is just the first step. But knowing how to budget is equally important. Here are some helpful tips:
– Take advantage of your bank’s mobile app to track your spending and available funds on your smartphone. Most banking apps will also allow you to send and receive transfers to and from other accounts.
– Set up a spreadsheet to track your expenses—both current and upcoming. This gives you a birds-eye view of where your money is going, and you can then adjust it to track ongoing expenses such as rent and bills.
– Use a budgeting app. These helpful little programs are explicitly designed to help individuals manage their expenses and spending. Some can even offer advice on how to make the most of one’s resources.
– Follow the 50/30/20 Rule. This means putting aside half their income for hard needs, such as rent and utilities, 30% for wants, such as social activities, and 20% towards savings.
Living Made Easy
If you have the correct budget for your first apartment, you can hit the ground running and enjoy a decent lifestyle with the confidence that you’ll be prepared for whatever the future may bring. If you need help finding a place, start browsing our communities!