Moving into your first apartment is an exciting step. It’s a sign of independence, adulthood and progress toward your future. It’s also a move that carries a lot of responsibility. In this article, we’ll discuss what you need to know before you rent your first apartment and how you can best prepare for this important milestone.
Consider your living situation.
The first step in renting an apartment is deciding how you want to live. Do you want a place to yourself or with roommates? Living alone will grant you your own space but could mean you’re solely responsible for living expenses.
If you live in an apartment with more than one bedroom, you may consider having roommates. This is great if you prefer company and don’t mind sharing common areas, plus it will help pay for rent and other monthly expenses.
Prepare yourself financially for the new apartment.
Once you’ve found where and how you want to live, try gathering as much information as possible about the upfront costs. In many instances, you’ll have to pay a security deposit as well as the first month's rent. Also, you’ll need to cover any application fees. Before applying, research your credit score. It may affect your qualifications for renting.
Depending on where you live, you may need to consider a variety of other initial costs. These could include moving fees or the cost to furnish the apartment. It may take some time before you’re financially ready to cover each of these expenses.
Also, you still want to remain financially comfortable after spending on any initial rental costs. This is why it’s important to practice smart saving strategies before renting.
Manage the cost of apartment living.
In addition to affording upfront costs, it’s also wise to prepare for the ongoing costs of living on your own. First and foremost is your monthly rent. A well-known formula to use as a rule of thumb: Rent should cost no more than 30% of your monthly income. Also, do your best to understand what’s included in your rent. In some cases, you may have to pay separately for utilities, renter’s insurance, Wi-Fi, cable, maintenance, etc.
If you don’t have one, this could be an ideal time to create a budget. It will help make sure you’re not living paycheck to paycheck or falling short on paying your monthly bills. Resist the temptation of impulse buys, eat in rather than dining out, and learn how to make your own coffee to minimize expenses.
Having money in the bank is especially important when unexpected expenses arise and require your immediate attention. You never know when you may face an unexpected shift in your finances, such as a loss of employment.
In any case, it’s important to have an emergency fund. The typical suggested formula for the fund is that it should cover three to four months’ worth of expenses. To reach this goal, find a savings account that meets your needs and contribute to it regularly. This strategy can help provide a cushion in a crisis.
Enjoy your new home.
Preparing for your first apartment doesn’t have to be hard. If you practice good financial habits to begin with, like limiting unnecessary spending and having a smart savings plan, you may even be able to create a path toward homeownership.
Being prepared also takes away a lot of stress so you can truly enjoy your new home!