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Budgeting for Your First Apartment

Budgeting for your first apartment can seem like a daunting task, but if you have some knowledge about budgeting, it can become easy and manageable. Whether you are moving out on your own for the first time or are upgrading to a larger place, you need to be prepared to budget for your new home. Once you have figured out all of the expenses that you will have, it is simply a matter of sticking to the effective budget that you have set.

While it can be exciting to mature and gain independence as you move out, you have to remember that you will now have more responsibility as well, such as managing the cost of rent and living expenses by yourself. Learning to manage your monthly expenses is one solid way to help you keep an effective budget. Strictly following your budget can be challenging for the first few months but if you are successful you can avoid getting into a situation that could leave you in debt.

There are several things to consider before choosing an apartment and signing a lease. You may want to take in to account your savings, monthly income, ongoing monthly bills and regular daily expenses. Factoring in all of these things can help you determine how much you can afford in rent and other living expenses. When it’s time to move to a new apartment, your savings can come in handy when paying for your first months’ rent, security deposit, and moving expenses. Studies show that saving an equivalent of three months’ rent is ideal for moving.

Knowing how much you can afford is where the struggle begins for some people. You should calculate how much you can afford before you immediately choose a large apartment in a posh community. Allocated your income is a great way to help you stay on budget with your regular monthly expenses. As a standard rule, your rent should cost no more than one-third of your gross income, the rest should be allocated to other bills and necessitates such as food or put into savings. It’s generally a smart idea to start by tallying up all of your current monthly living costs, such as your car payment, utility bills, and groceries. One way to save additional money each month is by adding up all of your expenses and subtracting that from your income, then take anything extra and place it in a separate savings account.

When budgeting to move, don’t forget the upfront costs for your new apartment. It is suggested that your first month in an apartment can cost twice as much as the average month after you’ve moved in. Almost every landlord will require you to put down a security deposit when you move in to a new place. Other upfront expenses that people don’t take into account are application fees, utility deposits, other bills such as cable and internet, and of course the cost of actually moving.

Your moving costs will vary depending on how much stuff you have, how big it is, and if you have someone willing to help you for a lower cost than hiring a moving team. If you have a friend with a truck that is willing to help, you can avoid a large fee by paying your friend or trading with them. If you have to rent a moving truck or hire a moving company, you will have a much larger expense. Make sure you budget for all of these things when planning for your move.

When you are ready to move into a new apartment, make sure you account for all of your expenses to avoid debt and stick to an effective budget. You can also read our blog posts on how to cut expenses and bad habits that will affect your budget.

Posted by: Thousand Hills Realty on May 14, 2016
Posted in: Uncategorized