Okay — so you’re probs reading this because you’re searching for an apartment (here’s an item checklist for when you’ve got one, BTW). I know that feeling of scrolling through sites, dreamily looking at homes that look straight out of Selling Sunset. But bestie, you’ve got to be realistic.
When looking for a new place, you need to think about your hard-earned dollar. Yes, having a gorgeous interior may be the dream, but there are ways to decorate your apartment without breaking the bank. So, you can stay within budget and live the good life.
I’ve spoken to experts to find out just how much rent you can afford, ways to budget to keep to this, and what happens if you can’t afford your rent. This way, you can get your quarters in order, and move into the right apartment for you and your wallet.
Keep on scrolling for all the info you need to get started…
How much rent can I afford?
First of all, you need to consider your current income-to-expense ratio. “A good rule of thumb for renters is to set aside about 30% of your income for rent,” says Ryan Barone, CEO of RentRedi. “That being said, you know your priorities and spending best — you may spend more or less than 30% based on your values.” It is also worth checking your landlord and city’s salary requirements for renters. “For example, in New York City, renters are required to make an annual salary equal to 40 times the monthly rent on the apartment they’re applying for,” he adds.
It’s also worth noting that if you don’t have any regular repayments, you may have a bit more to play with when you start booking in apartment tours. “Someone with no other debts such as car payments, student loans, etc may be able to afford a bit more,” says Kendall Meade, certified financial planner at SoFi. “I recommend that you sit down and build out your budget to see what would fit comfortably, while still allowing room for savings.” The key is in planning, people.
How to budget when renting
Okay, now you’ve figured out how much rent you can afford, it’s time to put a budget plan in place. Meade says that a great first step for this could be the 50/30/20 budget. “This is a system where you divide up your monthly income into three categories, based on percentage. 50% towards needs, 30% towards ‘wants’ and arguably the most important, 20% designated for ‘savings’ and other money goals like paying down debt.”
She says that it’s worth keeping in mind that if you are in a very high cost-of-living area, your costs may not fall within this range. Therefore, it is majorly important to adjust your wants category to offset an increase in needs, while maintaining your savings whenever possible.
If you plan out your budget and you are ever spending more than you are bringing in or don't have any room for savings, Meade explains that you may need to make some big changes. “This could include moving to a lower cost option, getting a roommate, or trading in your car for a more affordable option.”
Only a li’l bit off having enough? Meade suggests removing your card from shopping and takeout sites to stop impulse purchases, doing an audit of your subscriptions (do you need to pay for your ex’s Netflix? No!), and waiting 24 hours before making any non-essential purchases.
FYI: I personally find it helpful to carry a smaller wallet, like this cute FurArt one that’s Amazon’s Choice, rather than one that has space for cash. This is because I always seem to spend more when I have cash on hand.
What happens if I can't afford my rent?
Worried about having a change of circumstance that could leave you struggling? Thinking about what happens if your landlord ups the rent? There are lots of reasons why you could end up in this sitch. If you do, you def need to own up to the problem, in order to make it easier to solve. “Depending on where you live, a number of things can happen if you break your lease,” explains Barone. “Paying one or two months of rent is a common penalty for breaking a lease, but this can range depending on your landlord and/or the lease terms you have agreed to.”
To start with, Barone suggests reading your lease agreement carefully to see what your landlord’s terms were when you signed. This will give you a good idea of what to expect if you need to get out of your lease earlier than planned. From there, communicate closely with your landlord and see how you can both mutually help find a solution. “Some landlords might be okay with an early move-out and the more notice you can give, the better. It’s always best to talk with them and see to see what is possible to accommodate.”
Barone also adds that depending on your landlord’s circumstances, some may be able to accommodate a unique arrangement for you. This setup could mean discounted rent in exchange for maintenance duties. “You really won’t know until you ask, so strike a positive relationship with your landlord to see what’s possible,” he adds.
If you do work out a special arrangement with your landlord, make sure everything is laid out in your lease or a lease addendum. This way, everything is clearly documented. I recommend printing your contract and putting it somewhere safe and accessible, such as in a file organizer like this Amazon Basics one, which has over 44,000 five-star reviews.
Now you have all the deets for getting your apartment finances in order — yay to being an adult! I hope you find a place that you love, and that your move goes well. You’ve got this.
Up next: This is the ultimate apartment moving-in checklist
