You’re finally off on your own—ready to explore an unfamiliar city, make new friends and enjoy your new found independence. But before you immerse yourself in a new way of living, take some time to set up a foundation for your finances. Americans have been saving less each year since the mid-‘80s, with savings rates hitting as low as 2 percent in 2013. It’s almost like it’s engrained in our DNA to consume more, even when we don’t have the means to do so.
Being on your own and getting an apartment is certainly an exciting new chapter of life to experience, but you need to outline all of your possible costs so you can still set money aside for that rainy day.
Check out this apartment budgeting checklist for an overview of where your monthly spending will go, as well the hidden costs people often forget to incorporate into their budgets.
Application fee – If you’re looking to rent a new apartment, versus joining an existing lease, there will probably be some kind of application fee. Don’t worry about budgeting for this, but don’t be surprised to have to pay $50 or more to have your credit and background checked.
Security Deposit – Security deposits range depending on the building, landlord and rent amount. Expect to put down first and last month’s rent before you can move in. More stringent places may require first and last month’s rent, in addition to a separate, refundable security deposit.
Rent – You can do your budget a favor by staying within your means instead of lunging for that pristine two bedroom flat you don’t need. Opinions on rent budgets differ, but you should generally try to keep your monthly rent within 30 percent of your annual income.
Transportation – If you’ll be commuting by car to work, use a gas calculator to input your vehicle specifications and trip details for an estimate of what each round trip costs and then factor that by the number of days you’ll be commuting in a month. If using public transit, figure out what a round trip costs and do the same thing. Or, ask your employer to reimburse you!
Utilities – Depending on where you’re living, water and trash may be included within the rent, or extra along with electric and gas.
Cable/Internet – It’s really up to you if you want cable and Internet. In our opinion, one’s far more important than the other—can you guess which one?
Groceries – Some people don’t like to cook their own food, which makes eating considerably more expensive. Regardless, allow a conservative amount of money a week for groceries, such as $50, or $200/month, and tweak from there depending on what you actually need.
Insurance – If you have valuable possessions, you should protect them with a renter’s insurance policy. Use policy calculator sites like CoverHound to get an estimated premium for your apartment insurance.
Pets – If you have a pet, expect to pay anywhere from $50-$200 extra a month. There could also be a separate pet security deposit, which may or may not be refundable.
Parking – If you have a nice car that you don’t feel comfortable leaving on the street, be prepared to pay for monthly garage parking, which solely depends on the area or city you live in as far as affordability.
Laundry – Is there a washer and dryer in your unit? Are there coin-operated appliances in the basement? Or do you have to go someplace to do your laundry? These are all worth considering as laundry, whether we like it or not, is a constant.
Fitness – Do you exercise? If so, do you go to the gym to workout? Factor a monthly gym membership into the equation.
Hopefully the above checklist makes you think twice and cover your bases so you can grow your finances and still experience the quality of life you desire!