Managing a budget is not easy and will take a great deal of planning. Not only do you have to afford the monthly rental payments, but you also need to account for the general cost of living based on where you are moving to.
For example, the location may mean that you have a longer commute to work or incur other additional costs.
Budgeting is essential so that you don’t overextend yourself for how much is spent on the rent. It can be tempting to go for the largest apartment in the best area. However, you will find budgeting a real challenge if the rent is more than you can afford. Instead, take the time to browse apartment rentals carefully, finding suitable units within your budget.
Here’s more information on how you can budget your apartment rent wisely:
1. Take a long hard look at your salary
The budget all starts with how much money you make. You should aim to only spend between 20-30% of your take-home pay on rent. This will allow you to maintain a good standard of living and save a little here and there.
If you find that you can’t afford the place you want, then you should move on. Living in a nice place is great, but not being able to afford life’s little treats is very frustrating. One thing to factor into your calculations is that you could get a roommate. A roommate would allow you to potentially get a more extravagant place in a better area, as you would split the cost.
2. Budget for Everything
You need to include a budget for your utilities, car payments, commute, and anything else that you can think about. This isn’t something that you will be able to do in an hour. You will need to dedicate some time to this and make sure that you haven’t forgotten anything. Even all of the streaming services that you subscribe to need to be included in this.
A great way to identify exactly what you spend every month is to look at your bank account and credit card spending. Any pre-authorizations will show up regularly in your bills, so you can identify which ones you need to budget for. Ensure that your budget covers everything that you need it to.
3. Factor in Moving Costs
You will need to account for the cost of moving as well. This can be more expensive than you think. Even if you are planning to move everything yourself, rental trucks are not cheap. Plus, you might need to pay for professional movers as well as packing supplies.
Not factoring in the moving costs is a mistake when budgeting for your first month in the new apartment. Moving is notorious for taking a significant chunk out of your bank account.
4. Budget for Things you will Need to Buy
This is a tricky one as you may have grand plans to buy a new couch, bigger tv, kitchen island, and lots more. It is important to be realistic when planning purchases for your new place. You may think that you have to do it all at once. In reality, you just need the basics in your first month.
You have lots of time to get everything else in place, so try to do it a little at a time. Prioritizing your spending in the budget is critical. If you have a long list of things you need to buy, be sure to rank them in terms of what you must have versus what would be nice to have. This will allow you to plan your budget effectively.
5. Set a Budget for Unexpected Expenses
This can double as an emergency fund. Essentially, this is money that you have ready to spend for anything unexpected that may come your way. The funds may include replacing a damaged appliance or repairing a car that you need to get to work. Ideally, you have enough money in here to cover three months’ worth of expenses. Having this as a safety net should you lose your job is very important.
6. Budget for your Lifestyle
If this is your first apartment and you are not used to paying rent, you may find it a bit of an adjustment. You have been used to being able to spend all of your income on whatever you want. Renting an apartment is going to take a sizeable part of your disposable income away each paycheck.
Make sure you are prepared to go out with friends a little less, and perhaps cook at home more often. With proper budgeting, this won’t be as significant as it could be. The main thing to remember is that you need to prepare for making minor or significant adjustments to your net disposable income.