Your rent should generally be no more than 25% to 30% of your take-home pay, or after-tax income. This is a good rule of thumb to use when
budgeting for your first apartment – or
house. Of course, this may vary based on your financial goals and current expenses.
To get a sense of your other expenses and ensure you’ll have enough money for rent, make a budget worksheet. Below is a list of what you’ll generally need to account for. Itemize what each of these expenses will be so you can then understand what you can truly afford.
- Rent
- Utilities (water, heat, any housing fees)
- Food
- Transportation
- Student loan or credit card payments
- Clothes
- Entertainment
- Savings
- Cell phone
- Cable
- Internet
- Gas
- Car insurance
- Renter’s insurance
- Personal items
Don’t forget to build
savings into your budget. It’s important to have emergency money on hand in case your car breaks down or you’re faced with another unexpected event. You’ll also want to consider investing in renter’s insurance to help safeguard your belongings when you move out.
Estimating Monthly Apartment Expenses
Now that you know how much you can afford to spend on an apartment, it’s time to start hunting. When comparing apartments, understand what will and will not be covered. Some apartments may include heat and hot water in the cost of rent, while others won’t, so make sure you’re comparing apples to apples.
You’ll also want to look at different towns or neighborhoods to see how the cost of renting an apartment could change depending on where you live. For example, in
Newton, a one-bedroom unit averaged $625 monthly vs. $1,156 in
Raleigh, as of February 2022, according to rental platform
Zumper.
If rent stretches your budget, consider finding a roommate or two or three. Splitting the rent can help.
Tips for Renting Your First Apartment
There are a few other important factors to consider when it comes time to rent your first apartment.
- Explore the Neighborhood: Once you’ve found a few apartments you like, research the neighborhoods. Find out how far your walk or drive would be to work and other basic amenities, like grocery stores and gas stations. Practice this commute during the day and at night to make sure you’d feel safe and could picture yourself living there.
- Save Up: You’ll also want to save up for some initial expenses, including a security deposit, along with first and last month’s rent. This is equivalent to three months of rent and is typically required up front. Your landlord will use this to cover any damage that may occur while you live in the apartment. If your apartment passes inspection when you move out, you’ll get your security deposit back. You may also have to pay a pet fee or deposit if you have a cat or dog. Be sure to account for moving costs and any expenses associated with furnishing your new apartment.
- Get Insured: Once you close the deal, consider getting renter’s insurance to help cover the cost of replacing your belongings if they’re ever damaged or stolen. Keep in mind that apartment living means others are very close to you, so a fire in another apartment, for example, can travel quickly to yours. Rental insurance can protect your possessions and give you peace of mind.
From budgeting for a new apartment in North Carolina to move-in day and beyond, Peoples Bank is here for you. Contact us to better understand our checking and savings accounts and other financial options so you can reach your financial goals.
