An apartment search can be crazy no matter what stage of the search you’re in, but knowing what you can afford can make the search much easier. Before even thinking about what you are looking for in an apartment, it is important to ask yourself, "How much apartment can I afford?"
There is no better way to answer that than with an apartment budget calculator, a good look at your finances and some brutal honesty.
Learning how to budget for an apartment can be hard, but with the right tools and mindset it can be done. With the help of the apartment budget calculator, you can fine-tune your search by focusing on apartments that won’t put a hole in your wallet, savings or lifestyle.
If this is your first apartment budget, make sure to be as honest as possible about your financial situation. Renting your first apartment is a wonderful experience but can easily become a bad one if you’re not clear on how you’re spending your money and how much you can actually afford.
Here are the main expenses you need to consider when budgeting for an apartment. As each renter’s situation is different, you may have additional or fewer categories to consider, so make sure to adjust accordingly so you can obtain a clear picture of your budget. Remember; don’t tweak your numbers to resemble the calculation estimates. By being honest about how much you spend, you’ll have a better idea of what apartment you can afford and what changes you need to make, if necessary.
Your rent should be approximately one-third, or 30 percent, of your income.
You may be asked to buy renter’s insurance. The average cost of renter’s insurance is about $20 per month but can vary depending on location, the type of insurance coverage and even the type of apartment. Call for some quotes to get a better idea of how much it’s going to cost you.
Some utilities may be included in your rent; others may not. For the sake of a safer estimate, it’s better to include all utilities as separate from your rent. Utility costs typically include gas, electric, water, cable, phone service and internet.
Landlords typically multiply the cost of rent by 40 to determine the minimum income someone must have to comfortably afford to pay said rent. Try this out as a secondary measure.
Even if you receive insurance through your employer, you most likely have some kind of medical expenses to take into account whether you realize it or not. Certain exams, X-rays, labs and specialty visits require co-pays, and no matter how small they add up and should be included in your budget.
If you are under special health conditions or take care of someone who is, add those extra medical expenses.
Remember that with current changes in the country’s medical system, it is best to be prepared and include estimated medical costs above what you expect to pay.
If you have children, take into account all costs associated with child care, which may include day care fees, private school tuition, summer camps fees, the cost of hiring a babysitter and the cost of having someone else pick up your child.
If your children are school age, also take into account expenses such as school supplies, uniforms, school lunch fees and additional school expenses like possible lab or field trip fees.
When thinking about how much you spend on food, don’t just think about what you pay for your weekly grocery store trip. Also, take into account those quick trips in the middle of the week, stops at the gas station for snacks and trips to your local farmer’s market. Basically, don’t forget to add the smaller food expenses because when added up they can be a significant portion of your expenses.
If you’re not much of a cook or prefer to eat out, add those expenses your food budget. Make sure to add the cost of tipping.
Take into account all expenses related to your car, not just gas consumption. Remember that your car will require tune-ups, new tires, oil changes and other sorts of consistent maintenance.
Don’t forget about toll and parking fees.
If you use another means of transportation, no matter how cheap, add it to the calculations. If you use public transportation, add the cost of a bus or rail pass. If you use your bike, add the cost of maintenance. Add the cost of the city bike rental if you use it as part of your downtown commute.
Whether you want to or not, it’s necessary to have some form of savings. While you may be motivated to instead use that monthly "savings" money to cover a higher rent, don’t.
Make sure to include all types of savings accounts not previously mentioned, such as retirement and emergency funds.
In this day and age, it’s unusual to not have some form of debt. Include student loan and credit card payments into your budget. If you know you have a tendency of making late payments, include the late payment fees into your budget.
For most people, taxes are deducted from their paycheck, but not everyone has the same luck. If you are a freelancer or contractor, deduct your taxes on a monthly schedule and include the deductions into your budget. By doing so you will have a better idea of what you can actually afford and decrease the risk of owing the IRS money come tax season.
- Always include your miscellaneous spending in your budget. If you don’t, you won’t truly know what you can afford.
- That includes:
- Monthly subscriptions such as magazines, sample boxes, books, etc.;
- Entertainment such as shows, plays and movie screenings;
- Travel expenses such as luggage fees, meals and souvenirs;
- Meals out, if it is not already included in your food costs;
- Spending/pocket money.
The Big Picture
The budget calculator is here to help you but you don’t have to abide by it 100 percent. You know your finances and circumstances best. If you feel like it would be best to have more of a safety cushion, consider going a little lower than the recommendation for rent. If you know you’re up for a raise soon, consider going a bit above the recommendation instead. Whichever way you choose to go, make sure you are honest with yourself regarding your financial situation and what you can handle.
By comparing what you should be spending in each area and what you actually do, you also have the opportunity to make some lifestyle changes if you want to make the best future for yourself. Do you spend a little too much on takeout? Try cooking a few more meals yourself and you might just have enough money to pay rent for a nicer place. Feel like you can afford the apartment of your dreams but would rather save more money for a future trip? Look for an apartment with cheaper rent.
Keep in mind that apartments in Phoenix are quite varied and no matter the size of your budget there is an apartment out there for you. Once you know what you can afford, come take a look at the many Phoenix, Arizona, apartments for rent that Heers Management has to offer. Contact us today to schedule a tour!