Household Budgeting for the First-Time Renter

If you’re considering moving out of Mom and Dad’s house and into your own apartment, knowing how much you can afford can be daunting. RPM Midwest requires that you make at least 3 times the monthly rent, but that doesn’t necessarily mean that is the amount you would be comfortable paying.

To start your budget, gather up receipts, if you have them, as well as your last few pay stubs. If you deposit all of your money into a bank account and use that account for the majority of your purchases you can just print out your last bank statement which is available online with most banks. You’ll also need to research the cost of some local utilities such as phone and water, if necessary, typically prices can be found online.

Rent – How much do you think you can afford? Typically 30% of your total budget

Food – Usually 8-15% of your budget. If you’re still at home factor in how many free meals you may be receiving now.

Gas/Electric – Most times you can call the utility company for an estimate as long as you have the address.

Water/Sewer/Trash – Depending on the type of home you are renting and location you may be responsible for these expenses as well. Be sure to ask your future landlord what utilities you’ll be responsible for.

Gas – (for your car) Factor in if there is additional distance from work to your new home or other places you frequent.

Transportation – Such as bus fare or taxis.

Laundry – Your rental may or may not have facilities. Find out how much it costs, if anything, or if there is a Laundromat nearby.

Phone – Mobile and house phone, if desired.

Internet

Cable/Satellite – Check with your new landlord to see if satellite is permitted.

Renter’s Insurance – It’s not very expensive and covers your belongings, which is not covered by your landlord’s insurance.

Wardrobe – Don’t forget new clothes if a new job is the reason for your move.

Medical expenses – Particularly if you know you will be spending money on a regular medical bill or expense like medication or chronic condition.

Vacation

Entertainment – Such as movies, going out to eat, seeing a concert. Up to 10% on your total budget, but usually the first item to be trimmed when money is tight.

Savings – It’s always a good idea to have a buffer for emergencies and unexpected expenses, and at some point you’ll want to begin investing in a 401K or retirement plan, possibly even a Health Savings Account.

Now that you have researched and recorded the amount that you’ll be spending, you’ll want to check it against the amount of money you’re bringing in. There are plenty of places online that you can use for free to help plan your budget, you can also buy fancy software, or just create a spreadsheet or word document. You’ll want to keep it in a place you can save it, that way you can come back to it if your employment or living situation changes.

Moving expenses can mount up quickly, so before you take the plunge make sure you have significant savings. Many landlords will require a deposit equal to the first month’s rent as well as 1 full month to move in. Usually they will also charge an application fee – up to $50 per person is typical. There may be an additional deposit or monthly payment if you plan to have pets. (Don’t forget to budget their food and vet visit expenses into your budget) You will likely also need a few other items for your first apartment. Make a list of the projected costs of all of the things you can think of that you’ll need when you move in and start stockpiling before you move. Don’t worry about buying all of these things new, you can find great second hand items at thrift stores and friends and family who are tossing out perfectly usable items. Just make sure to get the word out early so they’ll think of you before they put their old couch on the curb. Your list will vary, but things to include are:

Living room furniture: sofa, loveseat, coffee table, side tables, lighting
Dining room furniture: table and chairs, china cabinet, sideboard
Bedroom: bed, nightstands, lighting
Linens: bed sheets, towels, curtains for every window, shower curtain
Kitchen: dishes, flatware, cups, microwave, possibly other appliances
Electronics: television, sound system
Misc. household supplies: cleaning supplies (sponges, cleaners, mop, bucket, broom, vacuum), some basic tools
Misc. moving supplies: moving truck (or pizza and drinks for your moving crew of friends!), boxes, tape, bubble wrap or packing paper

If you’ve tallied up all of these items and still think you’re prepared to make a big move, it’s time to start browsing online for rentals and making phone calls. If you’re now realizing the enormity of expenses you’re facing and worried about affording all of your bills, you can always consider a roommate! Just be sure to select someone that you can see yourself living with for at least 12 months.

To start your budget, gather up receipts, if you have them, as well as your last few pay stubs.  If you deposit all of your money into a bank account and use that account for the majority of your purchases you can just print out your last bank statement which is available online with most banks.  You’ll also need to research the cost of some local utilities such as phone and water, if necessary, typically prices can be found online.

Rent – how much do you think you can afford? Typically 30% of your total budget

 

Food – usually 8 – 15% of budget. If you’re still at home factor in how many free meals you may be receiving now.

 

Gas/Electric– Most times you can call the utility company for an estimate as long as you have the address.

 

Water/Sewer/Trash – depending on the type of home you are renting and location you may be responsible for these expenses as well.  Be sure to ask your future landlord what utilities you’ll be responsible for.

 

Gas – (for your car) Factor in if there is additional distance from work to your new home or other places you frequent.

 

Transportation – Such as bus fare or taxis.

 

Laundry – Your rental may or may not have facilities. Find out how much it costs, if anything, or if there is a Laundromat nearby.

 

Phone – Mobile and house phone, if desired.

 

Internet

 

Cable/Satellite – Check with your new landlord to see if satellite is permitted.

 

Renter’s Insurance – It’s not very expensive and covers your belongings, which is not covered by your landlord’s insurance.

 

Wardrobe – Don’t forget new clothes if a new job is the reason for your move.

 

Medical expenses – Particularly if you know you will be spending money on a regular medical bill or expense like medication or chronic condition.

 

Vacation

 

Entertainment – Such as movies, going out to eat, seeing a concert.  Up to 10% on your total budget, but usually the first item to be trimmed when money is tight.

 

Savings – It’s always a good idea to have a buffer for emergencies and unexpected expenses, and at some point you’ll want to begin investing in a 401K or retirement plan, possibly even a Health Savings Account.

 

Now that you have researched and recorded the amount that you’ll be spending, you’ll want to check it against the amount of money you’re bringing in.  There are plenty of places online that you can use for free to help plan your budget, you can also buy fancy software, or just create a spreadsheet or word document.  You’ll want to keep it in a place you can save it, that way you can come back to it if your employment or living situation changes.

 

Moving expenses can mount up quickly, so before you take the plunge make sure you have significant savings.  Many landlords will require a deposit equal to the first month’s rent as well as 1 full month to move in.  Usually they will also charge an application fee – up to $50 per person is typical.  There may be an additional deposit or monthly payment if you plan to have pets.  (Don’t forget to budget their food and vet visit expenses into your budget)  You will likely also need a few other items for your first apartment.  Make a list of the projected costs of all of the things you can think of that you’ll need when you move in and start stockpiling before you move.  Don’t worry about buying all of these things new, you can find great second hand items at thrift stores and friends and family who are tossing out perfectly usable items.  Just make sure to get the word out early so they’ll think of you before they put their old couch on the curb.  Your list will vary, but things to include are:

 

Living room furniture: sofa, loveseat, coffee table, side tables, lighting

Dining room furniture: table and chairs, china cabinet, sideboard

Bedroom: bed, nightstands, lighting

Linens: bed sheets, towels, curtains for every window, shower curtain

Kitchen: dishes, flatware, cups, microwave, possibly other appliances

Electronics: television, sound system

Misc. household supplies: cleaning supplies (sponges, cleaners, mop, bucket, broom, vacuum), some basic tools

Misc. moving supplies: moving truck (or pizza and drinks for your moving crew of friends!), boxes, tape, bubble wrap or packing paper

 

If you’ve tallied up all of these items and still think you’re prepared to make a big move, it’s time to start browsing online for rentals and making phone calls.  If you’re now realizing the enormity of expenses you’re facing and worried about affording all of your bills, you can always consider a roommate!  Just be sure to select someone that you can see yourself living with for at least 12 months.

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