How Much Should I Save for an Apartment?
How much should I save for an apartment? How much should I save for my first apartment? If you are looking for the place of your dreams, these questions are probably at the forefront of your mind. Before signing this lease, you want to make sure you have enough money set aside so that you won’t have a hard time making ends meet.
Figuring out how much you can invest in monthly rent payments can seem like a challenge if you’re new to renting. Even if you are a seasoned renter, these questions tend to cause significant stress when considering upgrading an apartment or moving to a new city. Here’s everything you need to consider when determining how much you can afford to rent.
Establish a basic budget
The first step in determining how much money to save for an apartment is to calculate a budget. You can follow these basic guidelines:
- Calculate your monthly income
- Calculate your monthly expenses
- Subtract your monthly expenses from your monthly income to see how much you have left to spend on your apartment
Especially if you are living alone for the first time without financial assistance, you may need to recalculate and adjust expectations several times to get yourself within a realistic range. If you lived with your parents or didn’t have to deal with these expenses while you were in college, you may need some time to get a feel for how much you will regularly spend on things like groceries, gasoline, etc.
Rental costs and the cost of living in general can vary widely depending on the location. A rent calculator that takes into account where you plan to live can go a long way in helping you calculate how much you can afford to set aside for rent each month. Then you will have a better understanding of what you need to save before signing the lease for the place of your dreams.
Accounting for living expenses
Calculating how much to save for an apartment involves more than your monthly rent. If your rent doesn’t include utilities, you’ll need to factor those costs into your overall savings plan as well. You’ll also want to take common living expenses into consideration. The bills that tenants typically pay include:
- To rent: The amount you will need to pay rent each month should stay the same for the duration of your lease, unless you opt for a monthly lease.
- Electric: Renters generally pay for this utility.
- Natural gas: Sometimes tenants pay for natural gas, and other times landlords pay for this cost on behalf of tenants.
- The water: Landlords often pay water bills on behalf of tenants, although tenants may have to pay for water directly in some cases.
- Internet and cable: You will have to pay for internet and cable if you want these services. You may also need to pay a setup fee depending on where you live.
Deposits, fees and other charges
There are also some one-time payments that you will need to consider when determining how much to save for an apartment. Costs to keep in mind include:
Tenants almost always have to pay a security deposit in addition to paying the first month’s rent when signing a lease. Security deposits can vary based on a few factors, although most security deposits represent at least one month’s rent. You usually get your security deposit back when you move out, as long as you don’t damage the unit or property. However, even if you know that you will be a model tenant who will leave the unit in perfect condition, you will need to plan for this payment when you first move in.
Pet Deposits and Fees
If you live with your pet, you may also need to allow for additional pet deposits and / or other pet fees. Pet deposits are a refundable fee similar to regular security deposits, while pet fees are non-refundable payments that you will pay to obtain the right to have a pet in your place. Renting animals is also one thing. Make sure to investigate any related costs if you plan to have a pet so you can budget accordingly.
If your landlord requires you to have utilities in your name, you may also need to pay a deposit for those services. You should get a refund (although it might take a few months to a year) as long as you pay your utility bills on time. Try using a utility calculator to determine how much you should have saved.
Many properties require that you have proof of insurance before your big move. Even if your apartment doesn’t require tenant insurance, it’s a good thing to have. This type of insurance usually doesn’t cost that much (think $ 10 or $ 20 per month), and it covers your apartment’s belongings in the event of damage or theft. If you already have auto insurance, you can check to see if your provider offers a discount for bulking.
A management company or landlord often does additional checks after you apply for an apartment. This can include background checks and credit checks, and tenants usually have to pay a fee for the landlord to perform the required checks. Sometimes companies offer special rental deals and waive these fees.
Finally, don’t forget to save for the big move – like figuring out how much you’ll need to spend on the moving day itself. Do you have family or friends ready to lend a hand? Are you going to pay the movers? Are you moving locally or traveling across the country? All of this will have an impact on the budget you will need for moving expenses.
Whether you’re looking for your first apartment, planning a move to a new city, or anything in between, you’ll want to save enough so you don’t have to struggle to make a rent every month. Keep in mind that you will need to factor in both ongoing payments (like your monthly rent) and one-time costs (like your security deposit) to build an accurate savings plan. Creating a budget that takes into account where you want to live, your income, and your monthly expenses can help you figure out how much you can really afford to spend on rent.
Start your search and filter only the apartments that match your budget. Search thousands of affordable apartments for rent on Zumper and get ready for the big move.