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Your First Apartment: Money Matters

Updated on January 21, 2008

There are practically a billion things you will need to consider when planning your budget for your first apartment.

First, you will need to understand (at least minimally) the real estate rental market in the area that you want to live. For example, you will not find a one-bedroom apartment in midtown Manhattan for $800; it's just not going to happen.

I find that the best thing to do to get a general understanding of housing prices in your area is to go to your local Craigslist page. Look at the rental listings there to get a feel for the various sizes of apartments and their respective rents. This is what I do any time I need to quickly understand the general cost of living in a new area.

Don't get stuck with unwanted debt by making a fundamental financial mistake. (Photo by Steve Woods)
Don't get stuck with unwanted debt by making a fundamental financial mistake. (Photo by Steve Woods)

Keep in Mind

  • The rent you pay every month should be approximately one fourth of your income (while many people pay closer to between one third and one half of their income, this is often ill-advised).
  • As this is your first apartment, you will likely have little or no credit history, which means you will need a guarantor signature on the lease (almost always your parents). That way, if you can't pay, the landlord has someone who can.
  • It is almost always cheaper to share space, and you don't necessarily need to compromise yourself to do so! A three-bedroom rent split in thirds will almost always be cheaper per person than a two-bedroom split in half.
  • The upfront cost will be substantial. Many places will require a security deposit (usually one month's rent) in case they need to make repairs to the damage you've done after you've moved out, and they might want first and last month's rent up front, as well. And if you go through a real estate agency, you will have to pay a broker fee, which is a percentage of the rent for the entire year.
  • Remember that rent will not be your only montly expense. You'll be responsible for utilities including electric, gas, water, heating, internet, cable, and phone (many landlords include some of these in the rent; make sure you know what you're getting).

Great Video about Apartments in NYC

Cut Some Corners

I'd highly advise you to start slow. Don't worry about automatically signing up for a phone in your new apartment (no matter how much fun it might seem to make an answering machine message that says, "Hey, you've reached _____'s place. Leave a message!")... not right away, at least.

Let it sit for a month or so. You will quickly see what you absolutely need and what you can afford to live without (I immediately knew that we needed internet installed within the first few days of moving in, for instance).

Also, as I said before, it will cost way more than you expect it to cost. So the less expenses you give yourself upfront, the easier it will be for you and your roommates to eat, if you know what I mean.

  • If you have a cell phone, you might not need to pay another $20-$100 for an apartment phone. Do you really want to take messages from your roommate's mother every ten minutes, anyway?
  • If you're in school and you live close to it or spend a lot of time there, do you bring your laptop? Are you magically not addicted to the internet? It might be worth the extra grocery money if you decide to check your email at school or a local internet cafe. And if you're living in a city, it seems like everywhere has free WiFi these days.
  • So many shows are available to watch online these days, why pay for cable? Unless you're a television addict, your first apartment probably doesn't need an extensive cable package (though a television seems to always be a good investment).

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Let's Recap

  • Find out what utilities your rent includes. It can make a surprisingly big difference if you don't have to concern yourself with heat or water bills.
  • Careful of your credit. You're new to the world of credit, so ask all the questions you want. And don't tie yourself up with your roommate's credit too much. That will just become messy.
  • It's your first apartment. You're living on your own. You need not live in the lap of luxury. You will quickly wonder why your parents let you run around turning on lights in their house all these years.


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    • profile image

      Shelterguru 4 years ago

      These tips are really helpful helenathegreat. When first finding out how much utilities actually cost, I became very paranoid about turning off lights and not turning the A/C on all the time. Even in decorating for the holidays, there are some tips I think everyone should know. Take a look at, which I found extremely helpful.

      Thanks again for posting...

    • profile image

      alexia grergory 6 years ago

      thanks to this article and thanks to people like you who helps others like this in very simple ways. finding the perfect apartment is indeed a big task cause you need to look into basic utilities and considers how much to spend for your utilities' billing as well.

    • profile image

      George 7 years ago

      I moved with New York Cargo Taxi - very affordable and friendly moving service.

    • westside1 profile image

      westside1 7 years ago from Santa Monica

      Thanks, I enjoyed every useful information given. Finding the right apartment is hard. If you are considering finding an apartment in Santa Monica or Southern California, consider visiting . They have helped over 1 million people look for a place that fits there price range.

    • profile image

      etmoving 8 years ago

      I have been going over what it takes to buy and rent my own apartment so thanks for such an informative hub!

    • propertyauction profile image

      propertyauction 8 years ago from UK

      Just in case one would consider buying a home instead of renting an apartment, one could get a good deal through properties being auctioned. I'm in that field myself and with a little research and preparation, your bid might land you a deal better than you might get through a real estate broker. Informative hub you have here. D

    • realestateuk profile image

      realestateuk 8 years ago from United Kingdom

      I'm sure somewhere before one decides to rent one has decided on either to buy real estate or rent for a long time. It really depends on one's status and desires in life and financial stability. I'm into real estate and I constantly get questions about whether it's better to settle down with a house or rent forever. So your hub on things to consider when renting one's first apartment is well appreciated.

    • jGaunt profile image

      jGaunt 8 years ago from London

      I still remember my first appartment. It was the size of a shoebox, and the facilities where very basic. But I guess that's the best place to start.

    • midnightbliss profile image

      Haydee Anderson 8 years ago from Hermosa Beach

      great informative hub with valuable information.