How to Budget for Your First Apartment

Your first big step into “adulting” is getting your own apartment. Whether you’re moving solo or finding a roommate, there are a lot of things to think about when you sign the lease.

Most of it revolves around knowing how to budget for your rental upfront and setting up a monthly budget to keep up with your bills.

Finances aren’t going to be the most fun aspect of your first apartment, but they are a necessary one. In today’s competitive rental market (especially in big cities) it’s important to have all of your budgeting skills up to par, as it could help you gain an edge over other applicants.

If you need some budgeting pointers, we’re here to help:

Secondary cities are more affordable

You likely have a dream city in mind, but rent can vary dramatically depending on the area. Most financial experts recommend spending no more than 30% of your gross income on rent.

Primary cities like Chicago and New York are known for their high cost of living as well as their tougher rental application processes.

Secondary cities tend to be significantly cheaper than primary cities. Housing, groceries, and entertainment usually cost less. Here are some reasons why:

• Lower Demand: Secondary cities often have a smaller population, leading to less competition for housing and resources. This translates to lower prices.

• Less Overhead: Businesses in secondary cities may have lower operating costs due to factors like rent and salaries. These savings can be passed on to consumers.

• Strong sense of community: Secondary cities can offer a more close-knit vibe compared to the anonymity of larger cities.

• Job opportunities: Many secondary cities are economic hubs in their own right, attracting businesses and offering a variety of career paths.

While generally cheaper, there can be exceptions. Some secondary cities experiencing rapid growth can see their cost of living rise. For example, Austin, Texas, a popular secondary city, has seen significant increases in housing prices due to its expanding tech industry.

The price difference between primary and secondary cities can be substantial. The key is setting a realistic budget based on your after-tax income and desired location. This will be important no matter where you choose to live.

Expect to pay a lot more upfront

Renting might be cheaper than buying, but you’ll still have to spend some serious cash in the first few months to secure your dream apartment.

In most situations, landlords will expect:

• Security deposit

• First and last month’s rent

• Application fees

• Possible finder’s or broker’s fee

• Pet deposit if you have one (or more).

• Utilities setup costs if renting a home

Expect to be paying two to three times your monthly rent upfront, so make sure you and your potential roommates are saving accordingly.

Budget for more than housing

Unfortunately, the above is just to secure the apartment itself.

Moving into the apartment is another large expense since renting moving trucks doesn’t come for free. You still need to eat to live and may need more things like furniture and household goods you haven’t really needed before.

You’re going to want a fully stock a kitchen and furnish several rooms, and those are going to take a significant amount of money.

Price out the initial costs to set up each room in your place. Start from the most important to the least and determine the essentials for each room:

1. Bedroom: This is your go-to for sleep and rejuvenation.

• Must-haves: Mattress (consider size and firmness), bed frame, pillows, sheets, blankets.

• Important: Dresser or closet for clothes storage, nightstand(s).

• Optional: Lamp(s), rug, curtains/blinds, desk and chair (if working from home).

2. Kitchen: The heart of the home for preparing meals.

• Must-haves: Refrigerator, stove/oven, basic cookware (pots, pans, skillet), dishes, trash can, basic utensils (spatulas, spoons, knives).

  • The fridge and stove/oven should come with the apartment

• Important: Microwave (optional, but convenient), table, and chairs (if the dining area is not separate).

• Optional: Toaster, blender, coffee maker, dish towels, pot holders.

3. Bathroom: For personal hygiene and “essential functions.”

• Must-haves: Shower curtain/bath mat, toilet paper, towels, washcloths, basic toiletries (shampoo, soap, toothbrush).

• Important: Shower caddy (optional, but helps organize toiletries), bathrobe (optional).

• Optional: Shower head upgrade, storage for toiletries.

4. Living Room: This is where you'll unwind and entertain.

• Must-haves: Comfortable seating (couch, futon, or chairs).

• Important: Coffee table (optional if using ottomans for seating), lamp(s).

• Optional: Rug, TV stand and TV, bookshelves, side tables.

Here’s the time when you want to find things that serve multiple purposes, cutting down both on how many things you need to buy and the money you need to spend.

Expect it to take 4-6 months to fully set up your apartment the way you want it. Stick to getting your move-in essentials (think mattress, dishes, shower curtain).

Then, purchase one additional item for each room every other week. This way, you'll create a comfortable and personalized space at a manageable pace, avoiding the overwhelm of furnishing everything at once.

Select roommates carefully

You’re striking out on your own, so why not take your college friends with you?

But hanging out with a friend and living with them isn’t the same thing.

Things might work out well, but there’s always the chance things go wrong.

Do you know how well they handle their finances? If your roommate doesn’t pay, you’re still liable for their half of the rent. Having to pay for someone else’s financial irresponsibility can make things awkward, if not outright hostile.

As such, you must screen each individual who might be a potential roommate.

If he or she seems like a great candidate, meet with him or her to discuss how you might divide bills and rent, as well as where you stand on additional guests and splitting up chores.

Save for those little extras

You might plan out every detail with you and your roommates and think all the bases are covered upfront. However, you’ll need to consider your rainy day fund, as well as other monthly expenses that might have slipped under your radar.

For instance, do you like going to the gym? You won’t have one on campus anymore, and gym memberships can get pricey, so you might have to reallocate your spending.

You also need what I call a “fun fund”– it’s not all work and no play, after all.

This budget is for nonessentials and surprises like:

• Dining out with friends

• Going to the movies

• Various hobbies (gardening, painting, etc.)

• Getting a flat tire

You can’t predict everything with certainty, so you need some extra money for all the little things that come up.

You’re looking forward to the freedom that your first apartment will give you, so make sure to budget a bit of that freedom in there as well.

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