If you are just getting your first apartment, you may be wondering what sort of expenses you need to expect to find out which apartments you can afford. In addition to remembering the traditional rules of thumb—your monthly income should be three times the amount of your rent or avoid spending more than 25 percent of your monthly salary on rent—you should also consider all the additional expenses that will you have to factor in for your apartment. In this article, we will break them down for you so that you can figure out the ultimate budgeting plan for making your rent.
First, at the bare minimum, you may want to follow the 50/30/20 budget rule when considering your rent. You might want to make sure that all of your needs, including food, gas, rent, internet, utilities, and so forth, fit into 50 percent of your monthly income. That would leave 30 percent of your income for wants and 20 percent for savings. This is a good step to remember when considering additional living expenses beyond rent.
Next, consider initial fees that you may need to pay even before moving into your apartment like a security deposit, which is traditionally at least the amount of the first month's rent, a pet deposit, renter's insurance, and any administrative fees. These initial fees alone could be a thousand dollars or more.
After you move into your apartment, you will need to factor in electric, gas, water, internet, cable, pet fees, garbage pickup, parking, and any administrative fees. It might be pretty easy for you to cover the $1,000 rent, but it may quickly turn into $1,500 after all the fees, which might be tighter for you. While you will not know exactly how much utilities will cost you until after you move in, you might want to consider asking the person who gives you the tour of the apartment what the average cost of utilities is.
When the Math Just Doesn't Add Up
You may find, however, that when you put together all these calculations that you cannot afford the apartment of your dreams. What now? Consider ways that you could cut expenses. Maybe you are willing to forgo cable or internet. Maybe you are willing to keep your house a little cooler in the winter and use blankets instead to trim down some electric costs. Maybe you need to consider a different area entirely. In any case, figure out what you really would like and ways that you might be able to reach that goal.
For example, you might consider a studio apartment rather than a one-bedroom apartment. You could also contact the apartment building, as one of my friends did, to see if there was anyone in the building with a two-bedroom apartment interested in having a roommate.
By factoring in your income, all of your expected expenses (including initial costs), and making adjustments as needed, you can put together the best budgeting plan and make your rent and other living expenses every single month.