For individuals and families seeking flexibility in a living situation, apartment living is a smart choice. A major perk is that renting can help simplify your finances, and make creating a budget easier. When you know you’ll have to spend a chunk of income on rent each month, it’s useful for all walks of renters to keep tabs on their money and establish parameters for spending and saving.
It doesn’t take expertise or major math skills to draft a budget that will put you in control of your finances as a renter. Start by getting motivated by the idea of organizing your money, which will help scale back stress in many areas of life. Put in a little effort and follow through with plans, and you’ll enjoy apartment living with financial peace of mind.
You’ve probably heard the rule about spending no more than a third of your net income on rent. When searching to find an apartment, compare rent prices and make calculations to ensure you stay within that magic number. Remember that upon signing a lease, there will be major upfront expenses including security deposits, pet fees and your first month’s rent all at once. You may also anticipate shopping for furniture and other household goods during this time. Be prepared for that onslaught of spending, which will of course settle down after the first month.
One of the many benefits of apartment living is the general predictability of monthly expenses. Use budgeting software or a simple spreadsheet to list these expenses (and due dates), and you’ll avoid getting caught by surprise when a bill pops up again. Establish your baseline income and continue to list out all other expenses, including those unrelated to apartments, such as car insurance and cell phone bills.
Establish your discretionary income— what’s left over each month after handling apartment living costs and other expenses. Hopefully you aren’t let down by this figure! If so, consider shuffling your expenses and adjusting spending habits as needed. Come up with a plan and stand by it. Perform a monthly review of your budgeting documentation and update as things change.
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