Moving into your first apartment is an exciting milestone, but it comes with the responsibility of managing your finances effectively. Creating and sticking to a realistic budget is crucial to ensuring you can comfortably afford living on your own, or with roommates. Follow these tips to set yourself up for success. 

Calculate your income. Review your recent pay stubs and ensure you know the amount of money that is available to you after taxes and deductions. This will be your starting point for a realistic budget. 

Set a rent limit. A longstanding rule of thumb is to not spend more than 30% of your income on living costs. This guideline helps ensure that you have enough left over for other expenses, including necessities and general spending money.

Account for utilities. The flat rate you pay for rent is not the only expense that comes with renting an apartment. Do some research into typical costs for electricity, water, gas, internet and other utilities in your area. These costs can vary month to month, so if you are sticking to a tight budget, you may want to look for apartments with some or all utilities included to reduce variation in monthly expenses.

Plan for groceries and essentials. Once you’ve allocated 30% of your income to rent and utilities, you should budget out a portion of your income for things like food, household supplies and personal care items. Track your spending in these categories each month to ensure you are not overspending. 

Consider transportation. If you drive, ensure any costs related to vehicle payments, insurance and gas are factored into your essentials budget. If you do not drive, consider costs for using transit and rideshare services.

Emergency fund. While your budget so far is covering your expenses month to month, you will also want to ensure that you are covering future, unexpected expenses. Allocate a small portion of your income to savings each month to protect yourself from unexpected financial hurdles.

Entertainment and leisure. After having allocated portions of your income to the above, the rest is left for you to spend on entertainment, dining out and other purchases. Be sure to track these diligently each month, as they are the easiest to overspend on.

Furniture and moving costs. While you now have a budget that covers your monthly expenses when you begin your lease, don’t forget to factor in the costs of moving. When looking for an apartment, consider the furniture you have and things you will need to buy to fill the space. Ensure you have enough money saved for first and last month’s rent, any new furniture you will need, and any needed moving costs.
By carefully planning and sticking to your budget, you can enjoy the freedom of your first apartment without financial stress.