How Much Should I Save for an Apartment?
There’s nothing quite like landing your first apartment. It’s a space to call your own, one that you can decorate and enjoy however you’d like. But many people are stressed at the prospect of saving up enough to move into an apartment for the first time. They look at rent in their area and compare it to their bank account and find that the numbers just don’t add up when it comes to apartment cost.
But don’t lose hope! With these apartment hacks to save money and a few smart financial changes, you can put yourself on the path to saving up for your dream apartment. You’ll need a bit of discipline and some patience, but in time you’ll be rewarded with the financial stability to get situated with your very own place.
Follow these tips and you’ll discover exactly how to save money when renting an apartment without stressing yourself out in the process.
1. Start with Your Goal in Mind
Anytime you set out to save money for a specific purpose, it’s good to set clear goals for yourself. Saving up for getting an apartment is no different. You don’t want to go into saving with a vague mindset of ‘building up savings.’ The more specific you are with yourself, the more likely you are to budget and save effectively.
Determine how much you’d like to be able to afford in rent each month. Generally, experts recommend that your monthly rent should be no more than 30% of your monthly income. So if you’re earning $4,000 a month, you should generally pay no more than $1,200 a month in rent.
That monthly rent is your starting goal, but you’ll need more than that to move into an apartment. You’ll likely need enough to cover your deposit as well. You should also plan for apartment utility bills and other apartment expenses, like moving costs and new furniture.
It’s also important to note that no amount of saving can make up for a rent-to-income ratio that’s too high. Even if you’ve saved up enough to cover a few months’ rent at the beginning, if your costs are too high for your income you’ll quickly begin eating into your savings. That nicer place isn’t worth the financial stress it will cause if it’s outside of your budget.
Stay focused on your goals and saving for your first apartment will be an enjoyable experience.
2. Lower Your Costs
The best way to save more money faster? Lower your costs. That will involve making some tough choices about what aspects of your life are most important to you, and whether you’re willing to give them up to bring you closer to your goal of having your own apartment.
Here are a few common areas where you can cut costs.
Nowadays, most people have multiple subscriptions to a wide range of digital services. Services like Netflix, Hulu, Spotify, and tons of others all require a monthly fee to use. While these services can be a convenient way to access entertainment, saving for an apartment might require you to look at which ones you could do without. Canceling one $10/month subscription won’t supercharge your saving, but canceling multiple unnecessary subscriptions can have a real impact.
Lower Your Bills
Many people go years without reassessing the costs they’re paying on things like car payments, insurance, and other costs. But you can save money by refinancing a car loan to get better rates and negotiating your insurance rates or switching companies. Don’t take your current monthly costs at face value—investing an afternoon in some savvy research can result in significantly lower monthly bills in multiple areas.
Eat Out Less
If most people were confronted with their total monthly costs of eating out, they would probably faint. Spending unnecessary money on food instead of eating at home can absolutely devastate your ability to save. If you’re willing to eat at home a few more nights per month, you can go a long way toward building your apartment fund.
3. Leave Yourself a Cushion
Paying your first month’s rent and deposit when you move in shouldn’t leave you with $0 in your bank account. You want to put yourself in a position to cover any emergencies or unexpected costs that arise in the period immediately after you’ve moved in.
With that in mind, we recommend putting away 20% of your earnings into savings, on top of savings dedicated specifically to covering your new apartment. So if you earn $4,000/month, try to put away $800 if that is possible.
Remember—these are ideal goals. Don’t beat yourself up if you’re not able to put that much away each month. Each financial situation is different. Saving will be easier for someone living in a rural area with a low cost of living than it will be for someone living in downtown Manhattan.
The main point is that you need to save beyond the cost of your apartment so that you have enough left over to live off until you replenish your bank account.
4. Choose Your Compromises
Let’s be honest. Unless you’re a millionaire, renting an apartment will involve some compromises—even if the apartment itself is flawless. If you want to shorten the time it takes to save enough for your first place, you’ll need to have a real talk with yourself about where you’re willing to avoid costs once you have the apartment.
You might be dreaming about throwing 30-person partners in your new mansion of an apartment. But that might not be practical. Really ask yourself what you need or don’t need.
You might find the perfect apartment that’s well within your budget, but then it comes time to furnish it. You might want to buy brand-new furniture from the finest designers, but that will mean waiting a much longer time to save up the funds to do it. Consider finding secondhand furniture that you can fix up or reupholster, and browse online listing sites for great deals. Not only will this save you money, but it can be a fun experience that beats getting hounded by furniture salespeople in a massive warehouse showroom.
5. Be Realistic with Yourself
The most important tip we can give you when saving for an apartment? Be real with yourself. It’s easy to tell yourself that you’re going to live on ramen and water for two months and save 90% of your income to move into your apartment faster. But the truth is that you’re better off setting reasonable goals and building your savings slowly.
Remember—there’s always another apartment. You might be tempted to leapfrog your savings plan because the perfect unit comes onto the market. But there will be another perfect apartment, and another after that. Stick to your plan and keep saving. The reward will come from moving into an apartment when you’re ready, which will make you truly appreciate your new home with none of the stress that comes from overextending yourself financially.
And while you save for your first apartment, you can get inspired and check out our roomy apartments!