How To Budget For Your First Apartment

April 28, 2021 3:25 pm Published by Leave your thoughts
Last Modified: April 17, 2024 11:12 pm
Reading Time: 8 minutes

Getting ready to move out can be stressful, and there can be a lot of expenses involved, especially if it’s your first apartment. It’s essential to stay organized and create a plan even before moving. There can be unexpected costs with apartments or various move-in extras that you may need to be aware of. Moving to your first apartment is exciting! Don’t let stress get in the way. Getting prepared beforehand will allow you to move forward with confidence!

There are a few strategies that you can use to budget for your first apartment. Following this budget process will help you make sure that you are in a situation that works for you. Don’t get into an apartment only to realize that it is completely outside of your budget. With these tips, you will be able to prepare with the right mindset and find the place that works for you.

1 – Calculate Your Rent Budget

The first thing you need to decide is how much you can pay for rent. There are a variety of things that you can do to calculate just how much you will be able to spend on rent. These calculations will involve reviewing your income and other expenses. You can use a rent calculator to determine the exact amount. Historically, rent prices have increased by approximately 3% to 5% each year in the United States, so make sure you keep that in mind for your long-term budget planning.

This is the first step anyone should take before even looking at apartments. It allows you to go into moving with a clear head of exactly how much you can spend each month. Without doing this, you run the risk of falling in love with a place that doesn’t fit your budget. Take the time before go looking at apartments to really understand how much you can spend on rent every month.

Preparing To Rent Your First Apartment

2 – Allocate Your Budget

Balancing your budget between rent and living expenses is like walking a tightrope. You want to spend enough on a place to call home without shortchanging your daily needs. Rent should only take a slice, not half of it. Experts recommend spending about 30% of your monthly income on rent. This way, you have the rest for groceries, utilities, and savings.

After setting aside 30% for rent, divide the rest between must-haves and nice-to-haves. Must-haves include food, utilities, and transportation. Nice-to-haves might be your Netflix subscription or weekend outings. You might find ways to tweak the nice-to-haves, like swapping dining out for cooking with friends. This approach helps you maintain a comfortable lifestyle without tipping the scales too heavily on either side.

3 – Save For A Security Deposit

A cost that can take a lot of people by surprise when moving is often the security deposit. This may be because security deposits vary depending on the property and the landlord. On average, security deposits are equal to one month’s rent, but this can vary significantly based on location and rental policies. Some properties consistently follow a system of making the security deposit the same price as the rent, but that’s not always the case. Finding out the usual cost beforehand will allow you to save and be prepared for the expenses.

When you have the amount saved early, you won’t have to worry as much during the move-in process. It will also allow you not to have that be a vast weighing factor on your shoulders. If you have the security deposit ready before, you can make a choice based on other things. Getting your security deposit ready is one of the best ways to budget for your first apartment!

And don’t forget about your credit score! Sometimes security deposits (and even rent prices) vary based on your credit, so make sure you learn the credit score you need for an apartment. A credit score of 620 or higher is often preferred by landlords, potentially lowering security deposit requirements.

4 – Budget for Initial Setup Costs

When you’re setting the stage for your big move, it’s easy to focus on the monthly costs like rent and forget about those initial setup charges that can sneak up on you. Think beyond the rent and security deposit. Your new home will also introduce you to costs for utility setup, perhaps a parking spot, and even the first grocery haul to stock your pantry. These are the initial investments that turn an empty space into your personal haven (but they do add up).

Crafting a budget for these upfront costs requires a bit of foresight and planning. Start by listing everything you’ll need to pay for before you even unpack a box. Utilities like electricity, water, and internet are essentials, and service providers may ask for deposits or installation fees. If you’re moving into an unfurnished space, consider the essentials you’ll need to purchase. A smart approach is to save a little extra each month leading up to your move.

Saving For A Security Deposit

5 – Furnish Your Apartment

Furnishing your first apartment without spending a fortune might seem like a tall order, but with a little creativity and strategic planning, it’s totally doable. Start by listing the essentials you need right away, like a bed, a table, and some chairs. This helps you avoid splurging on non-essentials before you’ve covered the basics. Thrift stores, online marketplaces, and yard sales can be gold mines for quality pieces at a fraction of the cost. This approach saves money, and it also adds character to your space with unique items you won’t find in a big-box store.

Turning your apartment into a home that reflects your style doesn’t have to empty your wallet. For those pieces you do buy new, look out for sales and discounts. Many stores offer significant savings during seasonal clearances or special events. And don’t overlook the potential of DIY projects to customize thrifted finds or refresh items you already own. A can of paint or some new hardware can transform an old piece into something that feels brand new and uniquely yours.

6 – Minimize Monthly Bills

On average, utility costs (including electricity, heating, cooling, water, and garbage) can range from $100 to $150 per month for a 915-square-foot apartment. Getting savvy about your utility usage goes a long way.

Consider this: opting for energy-efficient bulbs is eco-friendly, and it can also shave dollars off your electricity bill. Likewise, being mindful about water usage by fixing leaks and taking shorter showers can significantly lower your water bill. It’s about making small adjustments that add up over time. And when it comes to internet, don’t just settle for the first plan you come across. Shop around, compare deals, and don’t be afraid to negotiate with providers.

Think about programmable thermostats that adjust your home’s temperature automatically, ensuring you’re not overusing heating or cooling when you don’t need to. These smart devices can learn your schedule and preferences, optimizing energy use and helping you save money without lifting a finger.

7 – Plan For Pet Expenses

Another surprise expense can often be the cost of having a pet. Many properties require a pet deposit as well as a monthly pet fee. Not to mention, you may have to account for buying new things for your pet that will accommodate your space. If you’re planning on moving with your furry friend or getting one in the future, it will help to be aware of these costs beforehand.

Ensure that you know exactly the costs of having a pet at the places you’re interested in moving in. The costs can vary widely from property to property, so you may find an option that works a lot better than others. You and your furry friend deserve the best home!

Budget For Your First Apartment | Pet Costs

8 – Consider Renters Insurance

If you’re moving into your first apartment, renters insurance may not be on your radar, but it’s crucial in emergencies. It’s like a safety net for unexpected situations. Your furniture, electronics, and clothes are covered if stolen or destroyed. If you accidentally damage someone else’s property or someone gets hurt in your apartment, it might assist with costs beyond your belongings. Your budget will benefit from its low monthly charges, often less than a weekly coffee run.

The average cost of renters insurance in the U.S. is about $15 to $20 per month, offering coverage for personal property and liability. The cost of renters insurance should be weighed against the value of your items and peace of mind it provides. Insurance may be helpful if replacing your laptop or phone after a disaster sounds burdensome. Look over policies to see what’s covered and evaluate any special needs, such extra coverage for expensive products. This simple budgeting step will save you time and money later.

9 – Explore Rent Guarantee Insurance

Exploring rent guarantee insurance offers a safety net for both landlords and tenants, acting as an intriguing alternative arrangement. This type of insurance ensures rent payment even if the tenant faces unexpected financial difficulties, offering peace of mind and stability. It’s a win-win: landlords get assurance their rent will be paid, and tenants have a buffer during tough times.

Rent guarantee insurance can be a game-changer for first-time renters. It might seem like an extra expense upfront, but the benefits are substantial. For tenants, it means potentially bypassing the traditional, hefty security deposit or qualifying for an apartment that otherwise might seem out of reach financially. Landlords, on their part, are more willing to take a chance on first-time renters when this insurance backs them.

10 – Review Media Options

Media options may also be a hidden cost when it comes to living in an apartment. Some properties include a media package in your rent or make it optional. Media packages are a necessary expense to note as they can add a lot to your monthly rental cost. If you’re moving allows you to choose, you may want to look into a streaming service such as Roku or the Amazon Fire TV. Regardless, this is a cost that you will want to be aware of up-front.

Review Media Options

11 – Living with Roommates

An accurate budget for your first apartment with a roommate should include all expenses. Calculate your monthly income together first. Write down rent, utilities, internet, groceries, and shared subscriptions. Decide how much each of you can comfortably contribute. This guarantees you find an apartment within your combined budget and eliminates financial hardship.

Consider a shared savings fund for security deposits and furniture. You can plan for upfront expenses without affecting your budget by donating a set amount to this fund each month. Discuss unexpected costs and emergencies. Will you split emergency fund spending equally or by income? These agreements can avoid misunderstandings and ensure a successful financial collaboration as housemates.

12 – Organize Your Moving Plan

The act of moving alone can cause unexpected expenses! It may also depend a lot on what your personal preferences are. Many people don’t mind carrying their items themselves, while many would rather hire a moving company.

If you choose to move, you will need to keep in mind the cost of a moving truck or trailer. It would help if you also accounted for boxes, tape, or any other materials required for your move. Since moving can be such a high-stress environment, it’s best to get a clear plan before.     

Organize A Moving Plan

Getting set for your first apartment is like preparing for a big adventure – it’s all about expecting the unexpected and handling your money smartly. With these tips in hand, you’re all set to tackle those surprise challenges head-on and make the most out of living on your own, without breaking the bank.

Still, looking for your dream apartment?

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This post was written by

Isabella Housel

Isabella Housel is a passionate and versatile professional writer with a deep love for words and a commitment to crafting compelling content that engages, informs, and inspires. With many years of experience in the industry, she has honed her skills across various genres, from creative storytelling to informative articles and technical documentation.

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