Curious about how to afford living alone? Sometimes, living without roommates just seems irresistible. Your kitchen would be as clean as you’d like, you’d never have to deal with unwanted guests and you can have some quiet time whenever you want.
But there’s a reason many of us split our bills for years after college. Renting can be pricey, and we’re not sure how to afford living alone quite yet.
There are some cities where this just won’t be possible, but for many more affordable areas, setting a smart first apartment budget can help you find a place you can afford on your own.
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We’ll start with some simple budgeting rules, move into some money-saving tips and conclude with some helpful resources to guide you in the right direction. If you’re wondering how to afford living alone, this foundation will get you the head start you need. With some careful budgeting, you’ll soon enjoy a life where you don’t have to hide from annoying roommates.
- Set Your First Apartment Budget
- How to Save Money for Living Alone
- Create an Emergency Fund
- Consider Your Debt
- Finding an Apartment You Can Afford
- Estimate Moving Costs
How to Set Your First Apartment Budget
You’ve likely heard the general rule that rent should fall somewhere around 30 percent of your income. When you find this number, you’ll have a good understanding of which properties are available to you. It will also leave you enough money for living expenses, entertainment, emergency and retirement funds.
Here’s an easy formula to help you along. Just divide your income by 40 to get your rent threshold. Here’s an example:
$50,000 ÷ 40 = $1,250
Remember to use your actual take-home pay in the formula, not your salary. You more than likely have taxes and other withholdings drawn from your monthly check. If you use your gross salary, you’ll find you have less disposable income than you previously thought.
It’s also essential to note your rent is only a portion of your housing costs. You’ll also have to cover utilities like electricity, gas, cable and internet. You might need to purchase renters insurance, as well, especially if your landlord makes it mandatory in the lease. In general, the extra expense per month is well worth the peace of mind.
If you’d rather delegate the number crunching to a calculator, you can visit a few websites for help. Zillow has a Rent Affordability Calculator, which lets you enter your net income after tax and monthly debts, showing affordable rentals in your chosen location.
Moving forward, always consider the future when calculating your first apartment budget. Your plans can always change. If you’re considering homeownership or a move to another city, it’s important to have the funds set aside to pull off these next major milestones. That’s why it’s highly recommended to set aside savings each month, even if you have a tight budget.
How to Save Money for Living Alone
We’re all guilty of splurging a little on stuff we don’t need. After all, if you’re saving responsibly, it can be nice to treat yourself. If you’re figuring out how to afford living alone, however, it’s time to trim that budget.
Of course, these are just a few examples of minor money-saving changes you can make. Making small lifestyle changes may not feel like the difference between living with roommates and living alone. But collectively, small decisions can easily result in $100 or more in savings each month.
Here are some ideas of what to cut:
Start with your entertainment spending. Try to prioritize the streaming services that you use most rather than committing to three separate platforms. If you’re a compulsive book-buyer, focus on the novels that are inevitably stacking up on your shelves. Weigh your options when deciding whether to invest in the newest video game release.
While the costs of these entertainment options can feel small in the moment, they really compound over the course of a month or year.
2. Dining Out
Specialty coffees, takeout dinners, and happy hour drinks can put a strain on our savings. Try to put a limit on how many times you splurge on these things a month.
You can even substitute for them at home. It’s much cheaper to prepare your own food. There are tons of recipes online to mimic your favorite takeout specials, and you can invite some friends over for more inexpensive homemade cocktails. I’m not asking you to erase your social life — just to be more thoughtful about your spending.
3. Monthly Utilities
At home, your utility bills can also be reduced. Get used to colder temperatures in the winter or start turning down your thermostat when you go to sleep. Unplug devices to prevent any wasteful energy usage. Cut back on your shower time and try washing dishes with cold water.
4. Commuting Costs
Commuting to work or school can eat up costs over time. While it’s not always flexible, it might be worth it to explore your options. Carpooling with local coworkers, getting a bike or checking out public transportation may provide cheaper options that help you save on car maintenance and gas.
5. Rental Rates
Do you live in an expensive area? Consider whether moving somewhere more affordable could help you achieve your goal. The downtown area of a city may be convenient and exciting, but it also tends to have higher rental rates than other locations. In the most expensive cities, like New York and Boston, it becomes almost impossible for a young person to afford living alone.
Make Sure You’re Ready for Emergencies
Before you ditch roommates, make sure you have the flexibility to handle any issues that may pop up. A strained budget can remove the cushion you once had if you are suddenly faced with a busted car or a hospital bill. We can’t control what happens to us, but we can try to budget for it. It’s important to pad your emergency fund before figuring out how to afford living alone.
Many experts recommend starting with at least $1,000 in an emergency fund. For extra insurance, building it up to 3-6 months of living expenses can cover you if you lose your job or face another catastrophe. This might put a hold on your apartment dreams, but the security will be worthwhile.
You should also familiarize yourself with some of your rights as a tenant, understanding what your landlord can and can’t do. For example, you might have a legal basis to challenge an increase in rent if your building is rent-stabilized, and your landlord can’t raise the monthly rate in the middle of your lease.
Most tenants won’t have to worry about these problems. But being aware of your rights can help you avoid problems if they crop up. It’s best to study up, and knowing these small details can keep you out of a difficult situation.
Consider Your Debt
Today’s millennials and Gen Zers are in debt before they land their first job due to tuition costs. More 44 million borrowers owe a collective $1.5 trillion in student loan debt in the U.S. The average Class of 2017 graduate owes more than $28,000 in student loans, equaling a hefty monthly payment.
Debt is a challenge, but smart money management can help you create a game plan for handling it. You can consider deducting payments for student loans from your income to prevent using this money in your budget. If you have other costs, such as credit cards, you consider those as well. If possible, live at home for a few extra months to pay off debt before moving out on your own.
Finding an Apartment You Can Afford
You’ve trimmed the fat from your budget and you’re ready for the worst life can throw at you. If you’re ready to find your own place, what should you look for?
1. Expect Less Space
Everyone has different circumstances, and the space you can afford depends heavily on location and profession. Generally, however, renting an apartment on your own gives you fewer options than before. You probably have a specific budget. That means most young renters will be looking at studio or 1-bedroom apartments, whereas you might have been living in a house or larger apartment with your roommate(s).
Prepare yourself to live with less square footage. Your kitchen will likely be smaller and you might not even have a separate bedroom. Everything in this new place will be your own, however, and you won’t be colliding with anyone else in the bathroom each morning. If you’re set on figuring out how to afford living alone, then the trade-off should be worth it.
2. Search For a Deal
You can save even more on rent with a few simple tricks. If you can help it, try apartment hunting in the off-season. Landlords will have more flexibility — and more incentive to fill a vacancy — in the late fall and winter.
Keep an eye out for deals like a free month’s rent, too. Just make sure you do the math to see if a deal actually saves you money in the long run. A free month doesn’t mean much if the rental rate is much higher than anything else on the market.
3. Prioritize Amenities
You might be paying a premium for the best amenities, so make a list of which amenities matter most to you. Parking and laundry might be a must, but maybe you could pass on a workout facility if it’s driving up the rental rate.
You don’t want to sacrifice your quality of life, of course. But if you’re living alone on a budget, the extras are probably not worth the cost.
Estimate Moving Costs
Once you find a place to rent, don’t forget that you have to afford the moving process, too. If you have any amount of furniture, even just a bed and couch, you’ll need to move it to your new apartment. If you’re lucky, you have family and friends with pickup trucks you can pay with pizza and beer.
If you don’t have helpers, you may need to hire professional movers. In 2019, the average cost for a local move is $475, though the amount depends on what floor you live on and how many items you own. You should also factor in things you don’t own but may need to purchase, such as cookware, dishes and towels.
Your First Apartment Budget Can Help You Afford Living Alone
Living alone is awesome. While my time with roommates had its advantages, I’m now in control of my kitchen and I can keep my embarrassing Netflix choices running without shame.
For this luxury, you do have to be more conscientious about your budget, however. There are sacrifices you have to make if you’re looking to live without the financial support roommates can offer.
Learning how to afford living alone ultimately comes down to budgeting. Allocating your money between rent, utilities, saving and spending every month can be daunting, but it can also feel satisfying when you finally get it all under control. Take the time to truly prepare, and you’ll be comfortably enjoying your own pad soon enough.