Getting your first apartment is an exciting time, but if you’re moving in straight from home or from the college dorm scene, you may find that budgeting for the expenses you face isn’t a natural thing. If you’re not careful, you could easily come to the end of the month without enough income to cover your needs. Here are some tips you can use to budget for all of the expenses, both known and unseen, of your brand new apartment.
Step 1 – Figure Your Monthly Expenses
First, figure out what your monthly expenses are. These might include:
- Rent
- Renter’s insurance
- Utilities
- Cable or satellite TV
- Internet and phone charges
- Groceries
- Health insurance
Consider all of the other categories that you pay for each month, and ask friends or family for suggestions if you aren’t sure the total to put in a category. If you have expenses that you pay for annually, divide those by 12 so you can set aside each month the amount you’ll need to pay it when the bill comes due.
Step 2 – Figure Your Monthly Income
Next, figure your monthly income. Include your take-home pay, tips and any other income source you can rely on. If some of your income varies, like tips would, choose a figure on the low end of your average.
Step 3 – Determine Your Spending Money
Subtract your monthly expenses from your monthly income. You need to have a small buffer. this is your spending money to be used on other living expenses, like fuel, clothing, entertainment and similar items. You may find that you don’t have as much free money as you used to, but that’s normal. Learn to adjust your spending to compensate for less money coming in.
Step 4 – Care Out Some Savings
Finally, make sure you carve out some room in your budget for savings. You need to have some money to set aside every month for the unexpected expenses and emergencies that can happen, or to use for larger purchases, like a vacation or an eventual house purchase.
Having your first place is an exciting time. With a little bit of budgeting help and strategies, you can enjoy this time to the fullest. Before you jump out on your own, take the time to narrow down your budget so you can enjoy it without fear or risk.