It is important to understand how to budget for an apartment. Knowing how to budget when you only have a limited amount of money is extremely important when weighing how to select your new apartment.
First Apartment Budgeting Checklist
If you are a first-time renter, you will want to check out this budgeting checklist for your new apartment. These are ubiquitous expenses that should make up any list.
1. Moving Expenses
This is only a one-time expense for the time being when you move into your place. Make sure you utilize the services of a local company that charges reasonable prices for moving in order to save money. Most movers will charge you a flat fee for the use of the truck and then an additional amount per hour. The cost for the move will usually depend on the total time. If you move across the country, mileage will be involved.
Usually there are 2 movers with each move, you can add an additional mover that will drive up the cost per hour. You probably can surmise that moving into studio apartments won’t require as much time as a 2 or 3 bedroom. But 3 movers can work more efficiently than two when moving furniture. Be sure and get all of this information from the moving company you hire.
Rent should account for no more than 30% of your monthly income. Depending on your region, that proportion may be modified. You might score a home in a city like Frisco, TX that gives you the first month free!
Remember that a security deposit will be required. This can vary from a few hundred dollars to an amount equal to one month’s rent. Some apartments require renters insurance.
3. Electricity and Gas
Electricity, water and gas are three utilities that are usually paid for by tenants. Because you live in an apartment, your monthly electricity bill should be modest. You might find a landlord that takes care of these. Be sure and read your lease to see what you are responsible for.
The Internet has become an essential commodity in today’s day and age. This latter expense should be somewhere in the neighborhood of $30-$60 a month but can vary. You can go for cable services as well if TV is a must for you. One way to cut costs is to share this service with a roommate or friend.
5. Streaming Services (Netflix, Hulu, HBO Now, Etc.)
If you don’t watch cable very often, consider streaming services as a cheaper alternative.
6. Credit Card Payments
To prevent incurring interest, the best budget method is to pay the maximum amount written in your statement each month. This also allows you to get the most out of your grace period. Credit cards can throw your finances out of wack and affect you later in life. Try to keep your balance as close to zero as possible.
7. Student Loan Payments
Keep track of your student loan payments so that you don’t fall behind and incur unwanted interest.
8. Gym Membership
It is important that you take care of your physical health. You need to account for your gym fees separately while budgeting. A number of apartments will have a gym right in the community.
9. Groceries and Food
When you live alone, you must feed yourself, and food is considered another one of the living expenses you must factor in. Consider monthly food prices and how often you will eat out versus buying groceries. Inflation has recently raised the price of food.
10. Health insurance
Most people need to have health insurance in case there is an emergency health crisis. Make sure that you are also contributing some amount to your health insurance as well.
If you have the internet and if you have subscribed to a few streaming services, then this area is covered for you. Other outdoor activities like planning a trip, taking a vacation once in a while can also be accounted for in this section.
12. Car Expenses
Most renters need some sort of transportation and this usually includes are car which adds in both the cost of gas and car insurance.
13. Use a Budgeting App
Your bank accounts and credit cards are linked to budgeting software. They gather data and categorize your purchases for you effortlessly. They use sophisticated analytics to help you keep track of your expenses and, in certain cases, can give you advice on how to grow your money
What’s the 50 30 20 budget rule?
Fixed expenses receive 50% of the budget. This covers your rent, bills, insurance, and any loan or debt obligations you owe.
30% for having a good time! Everything you want but don’t need, like eating out, going to bars, buying clothes, and so on.
Invest 20% of your income in savings. Investing money is great for generating more money.
It is important that you follow a budgeting checklist to streamline the process and make things less stressful. Understanding how to budget by considering what you require and what you do not can help you tremendously with your first apartment. Use the tips above to get your apartment budget in check.