How to Budget for Your First Apartment

Moving in to your first apartment, whether it’s a small studio, or luxurious two-bedroom, is an exciting step towards independence, but it can also be a bit frightening. For the first time, you must be able to control your own budget, and ensure that at the end of the month you have enough money left over to pay your rent. Thankfully, there are some tips and tricks you can use to help you budget for your first apartment and ensure you're getting an apartment that fits your needs and your wallet.

How Much Rent Can You Afford?

First, you must determine how much rent you can afford. In general, you should aim to have your rent and utilities take up no more than 25 to 35 percent of your gross income. More than this, and you won’t have money for your other bills. Less than this, and you’re cheating yourself out of the opportunity to live in some nicer digs.

Know Your Expenses

Other than rent, make sure you are aware of all of the living expenses that will be falling into your lap. Some examples include:

• Gas or heating expenses
• Electricity
• Sewer and/or water
• Garbage
• Cable and Internet
• Groceries
• Transportation costs, including gas and car payment
• Renter’s insurance
• Money for entertainment and fun with friends
• Money for toiletries, clothes and household supplies
• Medical care and insurance

You may not know for sure how much you will need to spend on these different things but take time to consider what your costs may be. This will help you set a budget that is reasonable for your daily living costs.

Set Money Aside in Savings

As you plan for your budget, make sure it’s not so tight that you can’t set some money aside in a savings account. Emergencies, like a medical event or a car that breaks down, can cause you to tap into your debt a little too quickly if you don’t have emergency savings in place. Aim to have enough to cover one month of living expenses in your savings account as quickly as possible.

Plan for Move-In Costs

Moving isn’t free. Plan for moving costs, including your security deposit, truck rental, buying lunch for your friends, pet deposits and utility deposits, before you sign your lease. Also, remember to plan for the purchase of larger items, like furniture, you will need once you move in. These are one-time expenses, but they are expenses you need to plan for before your move.

As you make plans to strike out on your own and move in to your first apartment, take time to do a little financial planning too. It is time worth spending, because it will reward you with the financial freedom to truly enjoy your new apartment home.