Is the question, "Can I afford to move out", heavy on your mind? Well, I'm going to be sharing some key tips. A few years back, I signed the lease agreement for my apartment. I had never lived alone before, and a wise friend recommended doing so at least a year to prove to myself that I could.
I felt nervous but also prepared. I did a lot of research before signing the lease, and I still live here, almost six years later as a result. Finding an apartment, especially one you can afford, isn’t easy, but you can be successful with proper planning.
How much can you afford
The most important thing to consider when deciding to move out is how much your apartment, or home, will cost you in rent. The most significant expense you have when living on your own is the amount of money going towards your new landlord. However, there are some key considerations to keep in mind:
Determine the amount you can pay before things are unbearable
A common rule of thumb is to have your cost of living not to exceed 30% of your net income, also known as your take-home pay. For instance, if I brought home $2,000 a month after taxes and contributions, I would need to find a place below $600. After rent, I would have $1,400 left to pay for my other expenses, such as food and gas. When I first moved out, I was able to find an apartment in Central Phoenix for that amount. Still, since I had never lived independently, I opted for a more expensive apartment because it included utilities.
Find out the cost of utilities
As mentioned above, I live in Phoenix, Arizona. Tumbleweeds aren’t rolling around in front of your car as they do in movies, but it IS unbelievably hot in the summer. It’s so hot that sometimes, our airport shuts down because airplanes can pop their tires once they land on the tarmac.
In addition to summers lasting longer than any season, the heat causes to have high electricity bills. I’m not kidding when I say my BF paid $400 for July alone. Your utility bills will vary wherever you live. Still, they can get expensive if you live in an extreme climate, including one with long winters.
Plan for the expenses you may not think about
When contemplating what part of town or apartment you live in, it’s important to remember those expenses you don’t have to pay when living with someone else. Do you pay for your food? What about household items, such as shampoo, laundry and dish soap, toilet paper, etc.?
I hadn’t thought about laundry because everywhere I lived had a washer and dryer unit. My friend always added $20 to her living expenses since she didn’t have a unit. Hence, she insisted I jump on finding a place with one already installed. My apartment doesn’t have one, but I have at least six free laundry mats on-site, which was another incentive for me.
How much you should have saved
Suppose you’re feeling confident about all of the above, congratulations! It’s time to find your place. Now, you need to figure out how much money you need to save because if no one else tells you, moving is expensive!
Here are some of the key costs you'll need to keep in mind:
Both apartment complexes and landlords for single units will require a deposit. The deposit is typically the first and last month’s rent, plus a security and background fee. Some complexes may even ask for deposits for keys, remotes to get into the gate or parking spaces. It’s important to ask ahead, so you save an adequate amount before time.
Down payment for utilities
No one ever tells you (okay, maybe I wasn’t listening), utility companies can ask for a down payment when opening an account in your name. In Phoenix, you can pay for electricity as you go or with a monthly service. Still, both require a deposit, with the monthly service being a lot more. If you have no credit, sometimes they ask for the amount of the highest electric bill on record for that property. Don’t forget about your internet, water, and gas.
The other thing no one tells you when you’re moving into your place is that furniture isn’t cheap, and you most certainly will have your dreams crushed. Finding my dream couch I had set my mind on cost me $700 after taxes and delivery fees. I love my couch, and I’m still using it six years later, but I wish I had known how much it was going to be.
If starting from scratch, you are going to need to buy household items. You’ll at least need stuff for your bathroom and kitchen, plus cleaning supplies. You’ll also need paper products, soap, and kitchen basics like spices and cooking oil.
How to stretch your apartment budget
If you can afford to live independently and have adequately saved for this new venture, challenge yourself to make your money go further. Some of my favorite tips are down below.
Put the word out that you're looking
Let people know you’re looking for a new place to call your own. Our economy is forever changing, and with that, people have changed their living situations frequently. You may have a friend looking for a tenant for their rental property. Or maybe your boss’ sister is looking to sublet her place while she goes overseas. My friend shared she was looking recently, and another friend immediately said that their derby teammate had a duplex open. I’m helping her move tomorrow.
Location (Think outside the box)
Living in the coolest new neighborhood sounds cool, but it’s usually in the middle of gentrification, which means high rent rates. If you still want to be in on all the action, think about living in the next neighborhood over. Chances are, if you aren’t living on the main street, you can find a more affordable rental. You’ll have access to all of the amenities without paying the high price tag.
Availability to city transit
If you don’t drive a vehicle and instead rely on city transit, this may be a game-changer for where you live. Fewer transportation costs can free up more money for living expenses or just general savings.
Ask about utilities
Call to ask about utility average. If you’re nervous like I was, ask upfront what the average utilities are on the property are before deciding to live there. Worst case scenario, you dodged a bullet, best case, you know you can afford it. Like I mentioned above, utilities can make or break you if you live in an extreme climate.
Buy items in advance
The longer you know that you are saving to move out, the longer you have to plan. By planning all of your purchases ahead of time, you allow yourself to shop for the best deals and take advantage of clearance and sales. It will be more to move, but the savings could potentially be in the hundreds.
The bottom line
Living on your own is an exciting time in your life. However, you want to make sure you avoid common mistakes. You also want to make sure you can afford to move while still sticking to your financial goals. With proper planning and saving, you can celebrate your new chapter. We’re rooting for you.