Whether you’re moving out of your parents’ house, moving in with your significant other, or moving to a new place after college, moving to your first apartment is a big and exciting event. You’re about to get the freedom you’ve always wanted – and the responsibility that comes with it. You’ll have the chance to create your dream home and build your dream life, but you’ll also have to provide for your own needs and learn to solve your own problems. And you’ll find out that independence is more demanding and more expensive than you may have thought.
Living on your own requires a lot of hard work and determination – and plenty of financial resources. You need to start budgeting for rent, utilities, food, transportation, and so much more – expenses add up quickly and can cause you a lot of trouble if you don’t plan your finances wisely.
To avoid financial problems and ensure the successful start of your new independent life, you need to know how to budget for your first apartment and how much to save before moving out so you can easily cover your expenses.
You’ll find all the answers you need in the comprehensive first apartment budget checklist below.
Review your finances and figure out what you can afford
The first thing to do when considering moving to your first apartment is to assess your financial situation so you know exactly where you stand and how much you can afford to pay for rent and other housing expenses.
However tempting the idea of renting a big, state-of-the-art apartment in a prosperous part of town may be, you should not sign on a home that will eat up most of your money. You need to decide what part of your income you’re comfortable spending on an apartment rental and make that your benchmark.
So, how much should your first apartment cost? As a rule of thumb, you should aim to keep your rent payment under one-third of your monthly income. This seems like a reasonable standard, but it may not necessarily work for you – your financial situation and goals are unique, so you need to figure out what’s right for you.
Start by calculating how much money you’ll realistically have at the end of the month:
- Take a look at your monthly income (after taxes);
- Estimate your average monthly expenses – food, transportation, healthcare, loan payments, entertainment, etc. You may not have had to deal with many of these expenses while living with your parents, so do your best to figure out how much you’ll be spending on each of them;
- Subtract your expenses from your income;
- Allow for some buffer (money that can go toward savings, emergency funds, and unforeseen expenses – about 20% of your income) and see what’s left – that’s how much you have to spend on housing expenses (rent, insurance, utility bills, and home maintenance costs).
Once you get a number, think about your long-term financial goals, too – if you’re aiming to put a lot of money away for the future, you may want to get the cheapest apartment possible even if you can afford a higher rent.
All things considered, financial experts advise that you allot 50%-60% of your income for fixed expenses (rent, bills, insurance, loan payments, groceries, transportation, medical expenses, etc.), 20%-30% for things you want but don’t necessarily need (clothes, entertainment, travel, etc.) and 20% for savings and emergency expenses.
Consider your first apartment expenses
To make a realistic first apartment budget, you need to factor in all the relevant expenses:
1) Upfront costs of moving into an apartment
There are some one-time costs you need to account for when budgeting to move into an apartment:
Moving costs
How much does it cost to move into an apartment? It depends on the number and type of items you have for moving and the relocation distance.
When moving locally, you can rent a moving van to transport your belongings to your new apartment and ask a few good friends to help you carry your heavier items. You’ll have to pay a rental fee of about $30 for a small moving truck, pay for mileage (usually 99 cents per mile) and gas (you will be required to return the vehicle with a full (or half-full) tank of gas), and buy your friends who come to help you move lunch and beverages – your moving expenses will be relatively low.
If you’re moving heavy furniture and/or easily damaged items though, you may want to use professional moving services even when moving only across town – to make your relocation safer and easier. In this case, your chosen local movers will charge you by the hour. (See also: How much do local movers cost)
If you’re moving long distance, cross country movers are your best bet – unless you’re moving into a furnished apartment and have only some personal items to relocate, you’ll need experienced and trustworthy professionals to take care of your belongings. In this case, it will be the weight of your items and the distance to your new home that will determine your moving costs. (See also: How much do long distance movers cost)
Security deposit and move-in fees
When renting an apartment, you’ll be required to pay a security deposit (usually equal to one or two months’ rent) – it’s a guarantee that you’ll take good care of the rental property and will abide by the rules and regulations set by the landlord. If there have been no problems and the apartment is in good condition when you leave, you’ll get your security deposit back at the end of your lease.
In addition to the security deposit, you may also need to pay utility deposits and installation fees, administration fees and other one-time charges when moving into your new apartment.
If you want to use a real estate agent to help you find an apartment, you’ll have to account for agent or broker fees as well.
Furnishings
There are many things you’re going to need for your first apartment – must-haves you can’t do without and not-so-essential items that are needed to bring comfort and coziness to the place and make it feel like home.
So, find out what is already available in the property you’re renting, assess the things you own, and decide what you’ll have to buy for your first apartment. Factor in the costs of purchasing furniture and other essential household items in your first apartment budget.
Good to remember: If you’re moving to an unfurnished apartment, you’ll need a lot of money to get everything you need and probably won’t be able to afford buying it all in one fell swoop. So, focus on getting the most essential items first – basic first apartment furniture, basic kitchen items (appliances, utensils, cookware, dishware, etc.), bathroom necessities, essential electrical and electronic devices, bedding, rugs and curtains, cleaning supplies, etc.
You can find a detailed first apartment checklist here.
2) Ongoing expenses when renting an apartment
In addition to the initial expenses when moving into an apartment, you need to also budget for the recurring costs of first apartment living – your monthly apartment expenses:
- Rent – The rent is likely to be your biggest monthly expense when living on your own for the first time. As already mentioned, it should not exceed 25-30% of your disposable income;
- Renter’s insurance – Renter’s insurance costs about $10 to $20 a month, depending on the area and the type of the apartment;
- Utility bills – Some utilities may be included in your rent, but you’ll most likely have to pay for electricity, cable, Internet, etc. First apartment bills are usually $100 – $200 a month, depending on the type of the lease, the area, and the desired services;
- Garbage pickup fee – In an apartment, you’ll typically pay your trash bill with the rent and it will most likely be about $10-$20 per month;
- Parking (if you have a car) – Some apartment complexes offer free parking, while others require you to pay for a parking spot. You may also need to pay for a resident parking permit to be able to park your car on the street in front of your apartment building.
Of course, when budgeting for living on your own, you need to also plan for food and groceries, clothing and toiletries, public transportation, healthcare, pet care, loan payments, entertainment, subscriptions and memberships, etc.
Save up for moving into your first apartment
Once you have a good budget plan for your first apartment, you need to make sure you have enough money to cover all the planned expenses – plus some contingency funds.
So, how much should you save for your first apartment? It depends on the particular circumstances in your case, but as a general rule, you need to have 3-6 months’ income saved up before moving to your first apartment, so you don’t experience any financial difficulties after the relocation. Knowing that you can easily cover your moving costs and your housing and living expenses for a couple of months will give you peace of mind and will allow you to focus on organizing your relocation and building your new life.
See also: How much money to save to move out
When planning to move out on your own, you need to start the process long before the actual relocation – make an effective budget and save up enough so you’re financially comfortable with your move. Knowing how much to budget for moving into your first apartment will help you avoid financial problems and will set you up for success. Good luck in your independent life!
