How to save up money for an apartment

Why rent an apartment?

Renting an apartment is often a smart choice. Renters aren’t responsible for duties like property maintenance or property taxes, which makes renting an appealing option. Renting is also often much more affordable than owning a home. However, it’s still important to plan carefully before renting an apartment.

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How much should you save up for an apartment?

To save up for an apartment, you’ll need to know how much it costs to rent in your desired area. As a general rule, you should have at least three times your rent saved before moving into a new apartment. That means that if you’re looking to rent an apartment that’s $1,200 per month, you should have at least $3,600 saved for rent. However, beyond the equivalent of three months’ rent, you’ll also need additional savings for groceries and other living expenses.

Tips for saving up for an apartment

From budgeting for expenses to research on apartment cost, follow these tips on the best ways to save for an apartment (while having room leftover for other necessities and leisure):

Create an apartment budget

Whether it’s your first apartment or your fifth, creating an apartment budget helps you understand how much you’ll need to save and spend to move out of your current space into a new apartment. To start, look at your income; this determines how much you can spend on rent.

It’s wise to follow the 50/30/20 rule. According to the 50/30/20 rule, allocate 50% of your income to essentials (rent and groceries), 30% to discretionary items (like entertainment and dining out), and 20% towards savings and debt repayment (student loans, etc.).

For example, if you make $3,500 per month, you can spend $1,750 each month on essentials like rent, groceries, and utilities. You can spend $1,050 on “wants” and $700 toward your savings or debt repayments.

Check how much apartments and utilities cost in your current or desired area

Look at active apartment listings in your current or desired area. This tells you how much an apartment costs so you know how much to save for an apartment. If apartments in your area are on the more expensive side, you might need to spend longer saving up for an apartment. To ensure you budget accurately, research average utility costs in your area or ask potential landlords for estimates. This will help you determine exactly how much money to save to move out of your current residence and into a new apartment

Cut back on unnecessary spending

When you’re budgeting for an apartment, cutting back on certain types of spending can make a huge difference. For example, going out to eat fewer times per month can help you build your savings, making it easier to afford new furniture or your security deposit. Instead, try meal planning at home to save money. It’s also wise to look at other areas where you’re spending money each month. For example, are there any streaming services that you rarely use? If so, canceling those subscriptions can help you save money for an apartment.

Consider getting a roommate

Two-bedroom apartments are often much more affordable than one-bedroom apartments or studios. If a one-bedroom or studio is out of your budget, look for a two-bedroom apartment and a roommate to share it with.

Diligently saving for your apartment requires patience and discipline, but the reward of having your own space is well worth the effort. Up next, learn what renter’s insurance is and if you need it.