Getting your first apartment is an exciting moment in your life, but as a young person, you also want to be prepared for it. One of the best ways to prepare for your first apartment is to create a budget so that you are sure you can afford to live in the apartment you want and still have enough money left over to save and pay for other expenses and luxuries without putting yourself in debt. Debt can be incredibly dangerous for your finances, and can even force you into filing for bankruptcy if you find that you have no way out. Here are some factors you should consider when creating a budget for an apartment so you can be sure it is the right move.
How Much Should You Pay for Rent?
The golden rule for rent is usually that your rent should not be more than a third of your total monthly income. For example, if you make $3,000 your rent should be no more than $1,000 a month. The reason behind this is that it allows you to have enough money left over for living expenses, obligations, and financial goals. Of course, these numbers will vary depending on your goals and how much you spend in different areas of your life. It is still a good rule of thumb to keep in mind when deciding how much you can afford to spend on rent.
Additional Apartment Fees
Rent is the major factor in deciding on an apartment but it is not the only expense you need to account for. Here are some things you need to consider, especially if they are not included in your rent.
Utilities
Usually, as a renter, you are going to be responsible for paying the utility cost of your apartment. Sometimes it is included in the rent, but other times you are responsible for the exact cost. This includes electricity, natural gas, and water. Electricity is going to be everything you need to power your apartment, from the refrigerator to your hairdryer. Additionally, most renters have to pay for the water that they use, from showers to doing the dishes. Natural gas is what usually powers the heating and cooling systems in the apartment, but this can vary.
You’ll want to ask prospective landlords what the usual cost of utilities in the apartment is. If they don’t know or you want a second answer and you are in contact with the current or past tenants you can ask them what they usually paid. Either way, this will give you a general idea of what to expect but it isn’t always exactly what you will use. You can also reduce this cost by making smart choices about how much water and electricity you use as well as being frugal about the heating and cooling.
Internet and Cable
Just like the cost of utilities, internet and cable will be expenses you are responsible for. They are less likely to be included in the cost of rent, but you should always double check. The internet is pretty standard and most people need it to do work and other things. Cable on the other hand, is something you could save on. If you are already spending money on streaming services, you may have no use for cable. In that case you should definitely talk to your landlord about getting rid of it or taking it out of the rent.
Security Deposit
Before signing the lease on an apartment you will need to pay the first month’s rent and a security deposit. Usually, the security deposit is close to or the same amount as the monthly rent, but this can vary. For example, if your rent is $1000 a month, you should expect to pay about $3,000 as your security deposit and first month’s rent. You will need to make sure you have at least that much saved to apply for the apartment.
This will definitely vary, and some landlords may give you a break on the security deposit. The purpose of the deposit is to ensure that if you cause any damages while living there, the landlord can keep the deposit to pay for repairs. One way to help ensure that you get the deposit back when you move out is to be careful not to cause any damage, however sometimes things just happen.
In some cases, a landlord may allow you to make a very small non-refundable deposit instead. Then, if there are any damages that exceed the deposit amount you may have to pay those out of pocket. If you choose an option like this make sure that you have enough money saved to cover any possible unexpected expenses.
Roni Davis is a writer, blogger, and legal assistant operating out of the greater Philadelphia area.
