Renting your first apartment is an exciting milestone, and for some it initiates the start of adulthood. With this new-found freedom comes financial responsibility; which can be an intimidating concept for first-timers. Nonetheless, with the proper guidance and budgeting tips, you’ll be packing up the U-Haul and heading to your new place in no time. Here are some tips on budgeting for your first apartment.
Establish a Price Range
When budgeting for your first apartment, you’ll need to establish a price range. You can do this by first assessing your monthly income. You already know that your monthly salary needs to exceed your monthly finances, but by how much exactly?
The Balance offers helpful tips in their article How To Budget For Your First Apartment. They state that your monthly income should be three times greater than your monthly rent. This will give you a realistic price range as to where your monthly rent should fall within. For example, if your monthly rent is $1,500, you should have a target monthly income of at least $4,500.
Grab a Calculator and Start Adding
Outside of rent, you’ll be faced with numerous expenses, all of which need to be accounted for in your budget. Along with rent, common expenses include:
- Groceries
- Electricity
- Heat / air conditioning
- Internet / cable
- Furniture
- Parking
- Auto expense
- Moving costs
What Other Expenses Should Be Considered?
Be mindful that this list may not encompass everything that needs to be accounted for. Your expenses will vary depending on your personal needs as well as what utilities the apartment already provides. It’s important to be fully aware of where exactly your money is going in order to prevent unpaid bills and overdue credit card payments.
Even after all of these expenses, you’ll still need to set money aside every month for your savings and emergency funds. This extra money will be useful for any unexpected financial curve balls thrown your way such as job loss, medical expenses, or car troubles.
Include Renters Insurance In Your Budget
When considering all the necessary expenses in your budget, don’t forget about renters insurance. Fortunately, this insurance policy can be relatively inexpensive so this particular expense fits easily into your budget. Renters insurance offers financial reimbursement for restoring personal belongings when they become damaged by nature or are stolen. For more information about what renters insurance covers, view our whitepaper What Does Renters Insurance Cover?
In the unfortunate event of damage or theft, renters insurance protects you from directly paying the costs of restoring those personal belongings. This form of insurance also provides liability protection, meaning that if a guest were to become injured on your premises, the medical costs are covered.
During this exciting time in your life, take comfort in knowing your belongings are protected. For more information about a renter’s insurance policy, contact us at TJ Woods Insurance.
