How to Save Money for Your Own Apartment
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Keeping your finances in check can be difficult no matter where you live, but in a big city, where the cost of living is especially high, this task can feel completely overwhelming. That’s why we’ve partnered with The Financial Gym to share some of their best tips on managing your money. The Financial Gym is a personal financial services company that takes a fitness-inspired approach to their clients’ finances. By working one-on-one with a Certified Financial Trainer™, they teach their clients how to make smarter money decisions that add up over time to reach their life goals.
In this article, you’ll hear from their team on how to save money for your own apartment. Because while we’re huge fans of living with roommates, we also know that everyone wants their own place someday. Keep reading to discover their expertise, and check out the rest of their services on their website.
How to get started
Whether you’re ready to leave your parents’ nest, finally parting ways with your roommates, or simply ready for a change of scenery, finding a new place to call your own home can feel exhilarating. Aside from designing a space that resonates with your aesthetic, having an apartment to call your own helps you wind down and kick-up your feet after a long day at the office.
One key factor in making this milestone a reality: budgeting.
Moving into a solo living situation is freeing in some ways, but it also puts more financial responsibility on your shoulders. With a thoughtful plan, however, saving money for an apartment can be less painful and more rewarding.
Costs of renting your own apartment
Depending on your current living arrangement you may have varying levels of housing expenses. One thing to know is that you’ll need to budget for more than just rent.
Before making your next move, it’s good to have a sense of what to expect when it comes to basic living expenses.
A few ongoing costs to budget for, include:
- Monthly rent. The amount you’ll pay each month to your landlord or property management.
- Utilities. Utility bills, like gas, electricity, and water, are paid monthly or every two months. Some landlords cover all, some, or none of these expenses.
- Trash. An additional trash collection fee that some landlords pass on to their tenants.
- Landscaping. An additional fee for landscaping or gardener maintenance.
- Internet and/or cable. WiFi and/or cable service for your unit. This budget category may also include streaming services, like Netflix or Hulu.
- Parking. You may be charged an extra monthly fee to park your vehicle in your building’s parking lot or garage.
- Pet fees. Some properties charge “pet rent” for cats and dogs. You may even be asked to pay a pet deposit, on top of your move-in deposit, before locking in your new place.
- Renter’s insurance. Coverage that protects valuables in your apartment, in the event of theft or other covered damage.
- Online payment fees. If your landlord accepts electronic payments through a third-party service, you may be charged an online payment fee for the convenience.
The actual costs of these living expenses vary, based on your area and the specifics of your area. Planning ahead for these expenses can save you some stress down the line as you map out your budget as a solo renter.
How to save money for an apartment
To get a realistic sense of how much you’ll need to save toward your next apartment, crunch a few numbers. In general, your housing costs shouldn’t exceed one-third of your income.
Starting with your net income (i.e. your take-home income with taxes and retirement contributions already taken out), list all of the bills you owe each month. This includes student loans, car payments, cell phone service, and monthly subscriptions, like a gym membership.
If the difference falls short of your estimated living expenses, you’ll need to find ways to adjust your lifestyle or increase your income. Here’s how.
1. Separate your apartment savings fund
Set yourself up for success by making sure you can clearly see how you’re pacing toward your savings goal. Having your apartment savings sit in a checking account makes it easy to accidentally spend elsewhere. Open a high-yield savings fund to easily track your progress instead.
A simple way to ensure you’re saving money for your own place is automating your savings. Ask your HR department if it can direct deposit a percentage of your paycheck to your savings account and send the rest to your checking account.
2. Scale back on your future apartment
Moving out on your own for the first time can be emotionally and financially overwhelming. Instead of going full-steam on a lavish one-bedroom suite in a trendy part of town, consider taking baby steps with a studio that’s outside of your desired location (but still accessible to it).
This kind of compromise lowers the overall amount you’ll have to account for in your monthly budget. The money you’ll save also helps you slowly save toward your dream apartment in the future.
3. Cut non-essential costs
If your Monday morning iced latte brings you joy, there’s no reason you have to sacrifice it. Go ahead and indulge in your caffeine fix, but make sure you budget for it and cut expenses that aren’t as important to you.
For example, if you have a premium fitness membership at a studio and also have a membership at a local gym. Make a choice to cut one of these monthly expenses. Once you’ve made your choice, make sure to put automatically send that money to your apartment fund to accelerate your savings.
4. Sell your stuff
Have you recently upgraded your iPhone and your old one is sitting in a drawer? Perhaps you were gifted some wireless Bluetooth headphones or clothes that you’ve long forgotten about and don’t care to keep.
Shed the clutter and earn money in the process. As simple as it sounds, selling your unwanted belongings is an easy way to get extra cash for things that would just take space in your new apartment. And if you’re planning on living in the city, you already know that space comes at a premium!
5. Reconsider driving a car
Owning a car has its own set of expenses. You may be looking at a monthly car payment if you don’t own the car outright, auto insurance, gas, routine maintenance, and costly repairs. These expenses can easily suck hundreds, if not thousands, of dollars away from your housing budget.
See if your future neighborhood has public transportation available and whether it can be a reliable way to commute to work.
It’s enticing to jump on the first apartment you fall in love with, but keep in mind how your monthly finances look when a roommate or your parents’ financial help isn’t in the picture. Having your own place is certainly possible if you take the time to calculate what you can afford and save accordingly.